BONDS: Long-end Gilts Outperform Bunds Despite 30-year Syndi
May-20 09:25
German and UK yields are biased lower this morning, with the German curve lightly bull steepening and the Gilt curve bull flattening. Those dynamics come despite today’s syndicated launch of the new 5.375% Jan-56 gilt. Books are now closed and final terms have been set for the syndication, with the GBP4bln size smaller than MNI's expectations.
- The 10-year Gilt/Bund spread has tightened 2bps to 205.5bps this morning, but there hasn’t been an overt driver of the UK outperformance.
- The reaction to UK Chief Economist Pill’s opening remarks was relatively contained. Although Pill thinks the MPC started easing too early, he viewed May as the appropriate moment for a skip and seems to still broadly support quarterly cuts going forward.
- In the EGB space, Germany will sell green Bunds at 1030BST while Finland will issue RFGBs at 1100BST.
- Bund futures are +4 ticks at 130.58, off earlier session highs of 130.75. Gilt futures are +30 at 91.80, from a high of 91.91.
- Following a record high merchandise trade surplus ahead of US Liberation Day, the Eurozone seasonally adjusted current account surplus rose to E50.9bln in March (vs an upwardly revised E40.6bln prior). German April PPI was weaker-than-expected, but more interest will be in the flash Eurozone May consumer confidence reading at 1500BST.
- In the UK, focus remains on tomorrow’s April CPI report. MNI’s preview will be released later this morning.
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CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
Apr-19 13:51
- CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
- CARNEY SEES 2025-26 BUDGET DEFICIT OF CAD62.3B OR 2% OF GDP
- CARNEY PLANS TO REACH 2% NATO TARGET BEFORE 2030
- CARNEY SEES NEW CAD10B ANNUAL PLAN FOR GREEN TRANSITION BONDS
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
