SOUTH AFRICA: Inflation Expectations, PPI & Non-Farm Payrolls Eyed
- EWN quoted National Treasury Director-General Duncan Pieterse as saying that South Africa's G20 presidency will focus on enhancing debt sustainability and pointed to the continued need to improve debt restructuring and address liquidity challenges in developing economies.
- The Bureau for Economic Research (BER) will release the results of its inflation expectations survey for Q4 at 08:00GMT/10:00SAST. Later in the day, November PPI and Q3 non-farm payrolls will cross the wires at 09:30GMT/11:30SAST.
- SARB Governor Lesetja Kganyago delivered remarks at the opening of Day 2 of the G20 Finance and Central Bank Deputies meeting. The official did not touch upon monetary policy.
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BUNDS: Trades near Yesterday's top range
- Bund has edged back towards Yesterday's top of the range, but still short of the initial resistance seen at 132.73.
- The UK Data was mixed and provided a small 14 ticks swing in the Bund, initially gaining, to now trade below pre Data level, but still in a tight 20 ticks range.
- Small support in Bund moves up to 132.15, and this will be followed by the 2.50% level in Yield.
- With the UK Employment Data out of the way, only the German ZEW remains in terms of notable Data out of Europe.
- For the US, NY 1yr inflation expectation is due, but the main focus is on the US CPI Tomorrow.
- SUPPLY: Netherlands €2.5bn 2029 (would equate to 19k Bobl), UK £2.25bn 2043 (equates to 26.6k Gilt) could weigh, German €5bn Schatz (equates to 52.5k Schatz) should weigh into the bidding deadline.
- SPEAKERS: ECB Holzmann, Centeno, Rehn, Cipollone, BoE Pill, Fed Waller (x2), Barkin (x2), Kashkari.
STIR: 125bp Of Cuts Priced Over Next 5 ECB Decisions
Little net movement in EUR STIRs since settlement, with no major spill over from the recently released UK labour market data.
- ECB-dated OIS broadly in line with pricing seen this time yesterday, showing 29.5bp of cuts for December 62bp of cuts through January, 92bp of cuts through March and just under 125bp of cuts through June.
- That means the market is essentially fully pricing 5x 25bp cuts over the next 5 meetings, albeit with risks of a 50bp move evident in pricing covering the next 3 decisions.
- Euribor futures flat to -1.0.
- Final German CPI data matched preliminary estimates.
- German ZEW data due today, providing the first sentiment reading since the German government breakdown.
- ECB speak will come from Rehn, Centeno, Holzmann and Cipollone, with Rehn looking the most likely to touch on ECB monetary policy matters. The others may not cover the Bank’s policy path and matters surrounding it, given the topics of their respective addresses.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Dec-24 | 2.866 | -29.6 |
Jan-25 | 2.540 | -62.2 |
Mar-25 | 2.241 | -92.1 |
Apr-25 | 2.056 | -110.6 |
Jun-25 | 1.919 | -124.3 |
Jul-25 | 1.849 | -131.3 |
Sep-25 | 1.794 | -136.8 |
Oct-25 | 1.770 | -139.2 |
BTP TECHS: (Z4) Short-Term Bounce Extends
- RES 4: 123.12 3.382 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 3: 122.78 3.236 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 2: 121.53/122.62 High Oct 25 / 1 and the bull trigger
- RES 1: 120.15 50-day EMA
- PRICE: 120.06 @ Close Nov 11
- SUP 1: 117.88 Low Nov 7
- SUP 2: 117.70 61.8% retracement of the Jun 11 - Oct 1 bull cycle
- SUP 3: 117.34 Low Jul 26
- SUP 4: 116.54 76.4% retracement of the Jun 11 - Oct 1 bull cycle
BTP futures continue to find support and the contract traded higher again, Monday. Despite the bounce, the contract maintains a bearish tone. Price traded lower last week strengthening a bearish threat. A resumption of the downtrend would refocus attention on 117.70, a Fibonacci retracement point. Resistance to watch is 120.15, the 50-day EMA. A clear break of the average would cancel the bearish threat.
