EM ASIA CREDIT: MNI EM Credit Market Update - Asia
10-year US treasury yields were around 3bp lower at 4.0%, as Fed Chairman Powell stated inflation an...
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EQUITIES: ROLL PACE - Triple Witching Friday
EQUITY ROLL PACE: Some might favour rolling earlier, ahead of the FOMC.
US:
- ESA: 26%.
- NQA: 13% (below pace).
- DOW: 20% (below pace).
EU:
- VGA: 10% (below pace).
- Banks: 7% (below pace).
- Stoxx600: 9% (below pace).
- Dax: 10% (below pace).
- FTSE: 13% (below pace).
EGBS: OATs Lag Iberians As Ratings Convergence Continues
Friday’s rating actions help drive moves in EGB spreads early today, with Spanish (S&P upgraded Spain to A+; Outlook Stable) & Portuguese (Fitch upgraded Portugal to A; Outlook Stable) 10s flat vs. Bunds, while French paper is ~1.5bp wider (Fitch downgraded France to A+; Outlook Stable).
- Friday’s moves underscored the idea of rating convergence between France & the Iberians, given the political and fiscal risk evident in the former.
- The 10-Year Spain/France/Portugal fly is on track for a fresh cycle closing low, trading through -23bp.
- We highlighted the likelihood of the moves for both France and Portugal last week.
- Commerzbank suggests that the fallout for OATS is “likely to be limited, given that OATs are already trading markedly cheaper than double-A or single-A rated peers. While some investors may start to reduce single-A OAT exposure, others may use average ratings, adjust the rating thresholds in their EGB benchmarks, or utilise more attractive spread levels. We close our tactical OAT-Bund spread tightening view and turn neutral for the time being”.
Fig. 1: 10-Year Spain/France/Portugal Butterfly (bp)
SILVER TECHS: Continues To Appreciate
- RES 4: $43.000 - Round number resistance
- RES 3: $42.974 - 2.382 proj of the Jul 31 - Aug 14 - 20 price swing
- RES 2: $42.606 - 2.236 proj of the Jul 31 - Aug 14 - 20 price swing
- RES 1: $42.464 - HIgh Sep 12
- PRICE: $42.160 @ 08:13 BST Sep 15
- SUP 1: $40.195 - 20-day EMA
- SUP 2: $38.745 - 50-day EMA
- SUP 3: $36.216 - Low Jul 31 and a key support
- SUP 4: $35.285 - Low Jun 24
Trend signals in Silver remain bullish. The metal traded higher Friday and this delivered a fresh cycle high. The extension confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position, reinforcing current trend conditions. Sights are on $42.606 next, a Fibonacci projection. Initial support to watch is $40.195, the 20-day EMA.
