EURGBP TECHS: Monitoring Support

• Date $MM Issuer (Priced *, Launch #)
• 03/18 $3.5B #Volkswagen AM $550M 2Y +93, $300M 2Y SOFR+106, $1.1B 3Y +108, $500M 5Y +132, $500M 7Y +147, $550M 10Y +155
• 03/18 $3.5B #ING $750M 4NC3 +85, $750M 4NC3 SOFR+101, $1B 6NC5 +100, $1B 11NC10 +125
• 03/18 $2B *ADB 10Y SOFR+57
• 03/18 $1.1B #Xcel Energy $350M 3Y +85, $750M 10Y +135
• 03/18 $1B #Bangkok Bank 15NC10 +178
• 03/18 $850M #PacifiCorp 30NC5.25 7.375%
• 03/18 $562M #Chile Electricity 10.6Y +160
• 03/18 $500M #CNH Industrial Capital 3Y +87
• 03/18 $Benchmark Ford Motor 3Y +190, 3Y SOFR+203, 7Y +235
• 03/18 $Benchmark NatWest 3Y +78, 3Y SOFR+95, 5Y +95, 5Y SOFR+119
• 03/18 $Benchmark LG Energy 3Y, 5Y, 10Y investor calls

European curves steepened Tuesday, with short-end German instruments outperforming.

• Core FI fell to the session's weakest levels in morning trade as the two day rally in equities appeared to extend into a third.
• But the equity rally faded in the afternoon, with oil prices also fading, helping core FI fully recover (though also reversing earlier periphery / semi-core EGB spread tightening).
• The Bundestag approved the much anticipated German fiscal reforms including a loosening of the debt brake, though this appeared to have been well-anticipated as Bunds saw only limited and temporary weakness following the news.
• Comments by ECB's Rehn in an MNI Connect event suggested that there is a high bar to him not voting for a cut in April (markets still have it better than 50/50 implied). In data, the Eurozone trade surplus was slightly larger than expected in January, while German ZEW jumped to the highest in 3 years (corresponding to the DAX equity rally and above fiscal developments).
• The German curve twist steepened on the day, with yields down through the 10Y segment, while the UK's bear flattened through the 10Y segment (though 2s30s was higher). Periphery/semi-core spreads closed a little wider.
• We get final February Eurozone inflation data Wednesday, but the week's main events in Europe are in the UK Thursday with labour market data and the BoE decision.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.3bps at 2.176%, 5-Yr is down 1.2bps at 2.46%, 10-Yr is down 0.8bps at 2.81%, and 30-Yr is up 0.5bps at 3.121%.
• UK: The 2-Yr yield is up 0.8bps at 4.201%, 5-Yr is up 0.7bps at 4.295%, 10-Yr is up 0.5bps at 4.643%, and 30-Yr is up 1.1bps at 5.229%.
• Italian BTP spread up 0.8bps at 110.8bps / French OAT up 0.9bps at 68.3bps  

• Fed Funds implied rates have eased from earlier highs, having marked their most hawkish since late February, aided by a continued rolling over of crude oil futures (barring a quick blip following the Trump-Putin call) and equities showing little sign of paring today’s decline.
• FF futures point to 60bp of cuts for 2025 vs 58bp early today, but have still seen a large repricing from almost 90bp early last week.
• Cumulative cuts from 4.33% effective: 0.5bp for tomorrow, 5.5bp May, 19bp Jun, 28bp Jul and 60bp Dec.
• Today’s data has seen stronger than expected import price ex oil inflation (including international air fares helping consolidate already solid core PCE translation) and manufacturing leading a beat for IP in February.
• The Dec SEP had the median dot eyeing 50bp of cuts for 2025, something we expect to be repeated in tomorrow’s fresh SEP. A majority of analysts agree but those who do look for a change unusually look for moves in opposite directions.
• MNI Fed Preview: https://media.marketnews.com/Fed_Prev_Mar2025_With_Analysts_41cf08aa99.pdf