GILTS: meaningful Bear Steepening As Chancellor's Fiscal Credentials Questioned
Nov-14 15:35
Gilts faltering again as equities recover from lows, as opposed to on any fresh UK-specific developments
- Earlier source-based pushback against the idea that income tax thresholds will be lowered, coupled with a seeming scrapping of previously expected income tax hikes, has reintroduced a sense of fragility to the gilt market.
- Futures to fresh session lows at 92.04 (over 130 ticks lower), with volume picking up on the break of this morning’s low.
- Next support located at 91.82.
- Today marks the highest daily turnover for the Z5 contract outside of roll activity.
- Yields 8-17bp higher, curve steepening theme intact.
- 2s10s set for the highest close since October 9, 5s30s on track for the highest close since October 6.
- The long end failed to get anywhere near recovering losses during a relief rally, with 10+-Year yields making fresh session & November highs in recent trade.
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US TSY FUTURES: BLOCK: Large Dec'25 5Y Buy
Oct-15 15:33
- +13,503 FVZ5 109-23, buy through 109-22.75 post time offer at 1116:19ET, DV01 $591,000.
- The 5Y contract trades 109-23.25 last (-.75)
FED: US TSY 17W BILL AUCTION: HIGH 3.810%(ALLOT 92.62%)
Oct-15 15:32
- US TSY 17W BILL AUCTION: HIGH 3.810%(ALLOT 92.62%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 32.73% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 4.48% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 62.80% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 2.87
FOREX: Late Rally in GBP Sees GBPUSD Hit New Daily Highs Through London Close
Oct-15 15:26
- Monitoring some late strength go through in GBP in recent trade - GBPUSD rallies to touch a new daily high, and on decent volumes. Over 2,000 GBP Z5 futures have crossed over the past few minutes for some of the best activity of the day so far (cash equivalent approx. $175mln).
- No specific UK newsflow or headlines to drive the move here, but it is helping EURGBP drift into the London close. The cross is now close to closing the gap with yesterday's French pension reform-tied rally.
