EUROPEAN INFLATION: MNI EZ HICP tracking remains 2.1-2.2%Y/Y post-Portugal
Oct-31 09:33
* MNI's Eurozone flash HICP tracking estimate for October remains at 2.1-2.2%Y/Y after flash Portu...
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GERMAN AUCTION RESULTS: 2.60% Aug-35 Bund
Oct-01 09:32
| 2.60% Aug-35 Bund | Previous | |
| ISIN | DE000BU2Z056 | |
| Total sold | E5bln | E5bln |
| Allotted | E3.807bln | E3.81bln |
| Avg yield | 2.72% | 2.77% |
| Bid-to-offer | 0.94x | 1.10x |
| Bid-to-cover | 1.23x | 1.45x |
| Avg Price | 98.93 | 98.51 |
| Low Price | 98.92 | 98.50 |
| Pre-auction mid | 98.896 | 98.467 |
| Previous date | 03-Sep-25 |
OPTIONS: Larger FX Option Pipeline
Oct-01 09:29
- EUR/USD: Oct02 $1.1695-00(E1.5bln), $1.1750(E1.1bln), $1.1785-90(E2.8bln); Oct03 $1.1700(E1.1bln), $1.1845-55(E1.9bln), $1.1875(E1.2bln)
- USD/JPY: Oct02 Y147.95-00($1.6bln), Y149.50($1.0bln); Oct06 Y147.00($1.2bln)
- AUD/USD: Oct02 $0.6600(A$1.7bln); Oct03 $0.6600(A$1.5bln); Oct06 $0.6700(A$1.1bln)
- NZD/USD: Oct03 $0.6450(N$1.2bln)
BONDS: EGBs & Gilts Off Lows
Oct-01 09:28
Core global FI markets have stabilised after an early sell off, a downtick in oil provides cross-market support.
- Presence of the impending German 10-Year supply applied some pressure through early trade, while U.S. government shutdown headlines continue to dominate.
- A reminder that the U.S. NFP release, scheduled for Friday, is set to be delayed on the back of the shutdown.
- Bund futures trade as low as 128.24, before recovering to ~128.40. Initial support at the 128.26-29 zone was pierced, but not convincingly.
- German yields are 1-3bp higher curve steeper.
- Presence of the German supply and a recovery from worst levels in equities leaves major EGB spreads vs. Bunds flat to 1bp tighter.
- The NTMA confirmed that it will conduct one IRISH auction in Q4. No real reaction in IRISH spreads, although we think that the market would have been looking for no auctions in Q4, given precedent set in recent years.
- Gilts have also recovered from session lows, futures 90.70, bouncing from 90.54.
- Bears remain in technical control in that contract. Initial support and resistance located at 90.26 & 91.28, respectively.
- UK yields flat to 2.5bp higher, curve steeper.
- Ongoing UK fiscal deterioration helps keep the steepening technical trend intact. The latest round of reporting reaffirmed that Chancellor Reeves is set to scrap the two-child benefit limit, albeit with the potential for limitations given the potential for spiralling costs to cover larger families.
- ECB-dated OIS pricing little changed, showing ~8bp of further easing for the current cycle, while BoE-dated OIS shows less than 5bp of easing through year-end.
