(JBSSBZ; Baa3/BBB-/BBB-)
“LAUNCH: JBS USA $3.5B Debt Offering in Three Parts
$1.25b Long 10Y Fixed (Jan. 15, 2036) at +125
$1.25b Long 30Y Fixed (March 1, 2056) at +140
$1b Long 40Y Fixed (April 15, 2066) at +155” - Bbg
IPT Long 10Y: T+150bp Area
FV Long 10Y: T+130bp Area
IPT Long 30Y: T+170bp Area
FV Long 30Y: T+155bp Area
IPT Long 40Y: T+190bp Area
FV Long 40Y: T+175bp Area
• Please see our earlier fair value post for more information:
https://mni.marketnews.com/3ZKekBt
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JGBs have rallied off recent lows and for now, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
Treasury reported a record $16.5B in customs/excise taxes on May 22, reflecting the large increase in tariff rates that went into effect in April.
Treasury's latest estimate of the size of "extraordinary measures" available to use "in order to prevent the United States from defaulting on its obligations as Congress deliberate[s] on increasing the debt limit" is down to $67B on May 21 (of an available $299B), vs $82B a week earlier.