OPTIONS: Larger FX Option Pipeline
- EUR/USD: May19 $1.0435-45(E1.1bln)
- USD/JPY: May19 Y128.40-60($1.4bln)
- NZD/USD: May17 $0.6300(N$1.1bln)
- USD/CNY: May19 Cny6.5000($1.7bln)
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BONDS: EGBs-GILTS CASH CLOSE: Pre-ECB Rally
After jumping on the open following above-expected UK CPI data, European yields fell steady throughout Wednesday's session.
- Yields continued to move lower in the afternoon after and despite a US producer price upside surprise. Bunds bull flattened, Gilts bull steepened.
- Periphery spreads reversed earlier widening as well.
- There was no obvious fundamental driver, but with modest volumes and a long weekend / ECB decision imminent, there appeared to be an element of unwinding positions following an extended rise in yields.
- See our ECB preview (and note the title) - "Be Prepared For A Hawkish Surprise".
Closing Yields / 10-Yr Periphery EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.1bps at 0.074%, 5-Yr is down 2.4bps at 0.549%, 10-Yr is down 2.4bps at 0.766%, and 30-Yr is down 2.6bps at 0.901%.
- UK: The 2-Yr yield is down 1.9bps at 1.489%, 5-Yr is down 1.5bps at 1.549%, 10-Yr is down 0.4bps at 1.799%, and 30-Yr is down 0.4bps at 1.946%.
- Italian BTP spread down 1.2bps at 160.7bps / Spanish up 1.4bps at 93.6bps
US TSYS/SUPPLY: Preview: 30Y Bond Auction Re-Open
Tsy futures near late morning highs ahead the $20B 30Y Bond auction re-open (912810TD0) at the top of the hour. WI currently running around 2.770%, 39.5bp cheaper to last month's high yield. March auction recap:
- Tys pared losses after strong $20B 30Y auction re-open (912810TD0), 2.5bp trade through on 2.375% high yield vs. 2.400% WI; 2.46x bid-to-cover vs. 2.30x last month.
- Indirect take-up climbed to 71.25% vs. 67.95% in Feb; direct bidder take-up receded to 16.42% vs. 17.75% prior, while primary dealer take-up fell to 12.06% vs. 14.30%.
Timing: The 30Y Bond re-open results will available shortly after the competitive auctions closes at 1300ET.
FRANCE: Latest Ifop-Fiducial Poll: Macron: 53% (+0.5), Le Pen: 47% (-0.5)
Latest opinion polling from Ifop Fiducial shows a marginal gain for President Emmanuel Macron over right-winger Marine Le Pen. Macron rises 0.5% to 53% support, compared to 47% for Le Pen, down 0.5%.
- Full tables: https://www.ifop.com/wp-content/uploads/2022/04/RO...
- Moew Melenchon voters continue to say that they will back Macron than Le Pen, a crucial constituency for the incumbent to win over if he is to hold onto office. 37% of Melenchon supporters state that they will opt for Macron, with just 22% backing Le Pen.
Source: Ifop-Fiducial
