BOC: June Decision: Hold Is 80+% Priced
Jun-04 13:10
The Bank of Canada decision is in just over 30 minutes (0945ET) - our full preview is here (PDF link) :
- The BOC is likely to keep the overnight rate at 2.75%. Current OIS meeting-dated pricing implies between 15-20% probability of a 25bp cut today, though there are multiple analysts who have a cut as their base case - and the BOC has been known to surprise in the past.
- The next meeting in July is still very much "live" both with analysts and market pricing, with 17bp cumulative cuts priced through then, though the first full cut pricing is only through September's decision. 40bp of cuts are priced for the remainder of 2025.
- Statement / Press Conference: Consensus appears to be for a "dovish hold", keeping the door open to a cut in July. The BoC will emphasize once again that it is committed to maintaining price stability amid high levels of uncertainty. We wouldn’t expect any sort of firmer forward guidance.
- Monetary Policy Report / Projections: There is no MPR at this meeting – the next release is in July.
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US TSYS: Surprise Corporate Issuance Weighs on Tsys
May-05 13:07
- On an otherwise quiet start to a FOMC week and spring holiday closures -- today's potential outsized corporate issuance from Apple Inc and Comcast likely tempered the recent bounce in Tsys - spec-tied selling ahead of rate lock hedging has pushed futures back near early overnight lows:
- Tsy Jun'25 10Y back to steady at 111-05 after rising to 111-13.5 (+8.5) ahead of the opening bell, early overnight low at 111-04.5. Initial technical support is at 111-02 (Low Mar 2 / 50-dma) followed by 110-30.5 (50-day EMA). A clear breach of this average would strengthen a bearish threat and expose 110-16+, the Apr 22 low.
PIPELINE: Corporate Bond Update: Apple Inc, Comcast Guidance & Historicals
May-05 12:57
- Apple and Comcast deals likely to lead today's corporate bond issuance. Estimates for Apple issuance range from $5-10B today based on issuance size and frequency over the last five years (though Apple did make it into the top 20 list of largest issuance with $17B on April 30, 2013).
- As for Comcast, estimate for today's 3pt deal is under $5B based on issuance over the last five years ($2-4B), though Comcast is in the top 10 largest issuance with $27B over 12 tranches on October 2, 2018 -- reportedly for Sky PLC financing.
- Date $MM Issuer (Priced *, Launch #)
- 05/05 $Benchmark Apple Inc 3Y +45a, 5Y +50a, 7Y +60a, 10Y +70a
- 05/05 $Benchmark Comcast 7Y +115a, 10Y +130a, 30Y +155a
- 05/05 $Benchmark American Int Group 5Y, 10Y, details TBA
- 05/05 $Benchmark ADP 7Y +80a
BONDS: US 10yr Yield moves above Friday's high
May-05 12:50
- Bund fades somewhat, taking its cue from the move lower in US Treasuries, TYM5 is sold in 6.5k, USM5 1k.
- Although the US Tnotes (TYM5) hasn't broken 111.02, Friday's low, the US 10yr has moved above Friday's high, printed a 4.3336% high.
- The resistance in the 10yr Yield will now be back at 4.40% which equates to 110.24+.
