BONDS: J.P.Morgan Client Survey Reveals Increased Overweight In Periphery EGBs
May-29 07:44
J.P.Morgan’s latest European client survey reveals that “multi-currency European real money investors modestly increased their long duration exposure in EGBs since the last survey (from +0.18 to +0.20 years). This level remains broadly in line with the average observed since the beginning of ‘25 (+0.19 years)”.
- “Single-currency European real money investors also modestly increased their long duration exposure in EGBs (from +0.30 to +0.33 years). This level is in line with the average observed since early ‘23 (+0.33 years)”.
- “Investors increased their overweight exposure in the periphery since the last survey (from 15% to 20% net long). This level remains above the average observed since the beginning of ‘23 (8% net long)”.
- “European multi-currency investors modestly increased their exposure in USD (from +0.04 to +0.05 years)”.
- “Single-currency investors in GBP increased their long duration exposure (from +0.23 to +0.35 years). This level is close to the average observed since the beginning of ‘25 (+0.36 years)”.
- Note that all the deviations provided above are against the respective benchmarks.
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EURIBOR OPTIONS: Call spread vs put spread
Apr-29 07:32
ERU5 98.50/98.625cs vs 97.9375/97.8125ps, bought the cs for 0.75 in 5k.
GILTS: Firmer, Recent Ranges Intact
Apr-29 07:25
Gilts initially firm given the continued move lower in crude oil futures, although moves away from session highs in core global FI peers limit the rally.
- Futures stick within yesterday’s range, trading as high as 93.25 before fading back to 93.10 last.
- Initial support and resistance located at 92.20/93.34, recent bullish technical theme remains intact.
- Yields ~1.5bp lower across the curve.
- 10s below 4.50%, with yield support located at 4.460% still untested.
- Spread to Bunds remain pinned around 200bp after the pullback from April highs (218.8bp), the April 8 closing level (197.4bp) remains intact.
- GBP STIRs still around levels flagged ahead of the gilt open, showing ~90bp of cuts through year end.
- On the supply front, the DMO will come to market with GBP900mln of the 1.25% Nov-54 I/L line this morning.
- The only previous auction of the line came in January, with a slightly larger auction size of GBP1.0bln. A decent bid-to-cover of 3.06x was seen at the prior auction. Demand will be watched closely at this auction as it is the first long-dated linker auction since the U.S. tariffs were implemented.
EQUITIES: The Banking sector leads in Europe
Apr-29 07:20
- The Banking sector (SX7E) leads in Europe, its best level since the 2nd April, and immediate resistance comes at 190.12, the April high.
- Estoxx futures (VGM5) is in turn underpinned, but trades in a small range and still short of the 5150.00 level, this was Yesterday's high, and best print since the 4th April.
