US: MNI POLITICAL RISK- Johnson Tees Up Vote On New Spending Deal

Dec-20 13:09
  • House Speaker Mike Johnson (R-LA) intends to hold a vote this morning on a new funding plan to avert a government shutdown at midnight tonight. We have a roundup of what to expect inside.
  • President-elect Trump issued a new tariff threat against the European Union, threatening a trade war with the bloc if they don’t purchase more US oil and gas.
  • President Biden announced a final round of student debt cancellation, promising to erase the student debt of 55,000 public sector workers.   
  • One of the casualties of the government funding negotiations is likely to be a package of bills to curb outbound US investment in some parts of the Chinese tech sector.
  • US allies say Biden’s strategy of slow-walking key weapons amid fears of a nuclear escalation with Russia cost Ukraine a chance of victory.
  • Senior US diplomats have arrived in Damascus for talks with the rebel faction that now controls most of Syria.
  • US officials are continuing to temper expectations of a ceasefire agreement in Gaza, despite positive signs from Hamas that they may be open to more concessions in light of the Israel-Hezbollah ceasefire deal and Iran’s diminished regional power.
  • Poll of the Day: Democrat, Republican, and Independent foreign policy leaders alike believe that security alliances benefit both the United States and its allies

Full article: US Daily Brief

Historical bullets

OPTIONS: JPY Hedges in Demand, With BoJ Pricing Still Evenly Split for Dec

Nov-20 13:06
  • Front-end G10 FX vols saw support across the Tuesday session on the back of the Ukraine/Russia escalation, and 1m USD vols are building from there, with EUR/USD 1m implied marked up to 8 points for a new post-election high. Options volumes in the pair has been building alongside weakness in spot today, with a cumulative $1.1bln traded across the 1.0500 put strike and $1.5bln across 1.03-1.04 puts. Conversely, the majority of upside interest is clustered between 1.0650-1.0700 calls, across which $2.8bln notional has traded today.
  • USD/JPY 1m is firmer above 11 points as the contract this week captures the final BoJ decision for the year on Dec19th, for which markets remain very evenly split on whether the Bank proceed with a 25bps rate hike. The National CPI data due Thursday (Ex-food & energy exp higher by 0.1ppts at 2.2%)
  • As was the case yesterday, EUR/JPY vol hedges remain in firm demand, with the larger strikes crossing the DTCC today consistent with a Y164.00 straddle and a Y158.20/170.20 strangle, both of which roll off at the expiry directly ahead of BoJ day.

STIR: Repo Reference Rates

Nov-20 13:03
  • Secured Overnight Financing Rate (SOFR): 4.57% (+0.00), volume: $2.275T
  • Broad General Collateral Rate (BGCR): 4.56% (+0.00), volume: $812B
  • Tri-Party General Collateral Rate (TGCR): 4.56% (+0.00), volume: $780B
  • (rate, volume levels reflect prior session)

PIPELINE: US$ Corporate/Supra-Sovereign Debt Update

Nov-20 12:55
  • Date $MM Issuer (Priced *, Launch #)
  • 11/20 $600M Adani 20Y +7.45%
  • 11/20 $Benchmark International Development Assn (IDA) 5Y SOFR+47
  • 11/20 $Benchmark Commonwealth Bank of Australia (CBA) 2Y +50a, 2Y SOFR
  • $12.25B Priced Tuesday, $23.1B/wk
    • 11/19 $3B *Lloyds $1.25B 4NC3 +85, $750M 4NC3 SOFR+106, $1B 11NC10 +120
    • 11/19 $2.65B *Alibaba $1B 5.5Y +65, $1.15B 10.5Y +90, $500M 30Y +105
    • 11/19 $2.5B *Republic of Turkiye +5Y Sukuk 6.55%
    • 11/19 $1.75B *National Australian Bank (NAB) $1B -3Y +38, $750M -3Y SOFR+60
    • 1/19 $1.25B *Vistra Operations $500M 2Y +80, $750M 10Y +133
    • 11/19 $600N *Corebridge Financial 40NC5 6.375%
    • 11/19 $500M *Emirates NBD WNG 5Y Reg S +90