US FINANCIALS: Moody's Ratings upgrades JPMorgan Chase's Sub, Jr Sub -bbg
(JPM; A1/A/AA-)
Moodys upgrades BCA 1 notch to A1, affirms Sr Unsec at Aa2, Sub and Jr Sub upgraded 1 notch to A2, A3 respectively, citing superior financial performance wrt PPNR, ROA, rise in mkt sh.
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GILT AUCTION PREVIEW: On offer next week
The DMO has announced it will be looking to sell GBP1.5bln of the 0.125% Aug-31 linker (ISIN: GB00BNNGP551) at its auction next Wednesday, October 15.
FRANCE: Rpts-Lecornu Could Be Reappointed; Wider Deficit Targets To Pass Budget
France's political environment remains in a state of uncertainty ahead of caretaker PM Sebastien Lecornu's appearance on France 2 this evening at 20:00CET (14:00ET, 19:00BST). Earlier, Lecornu claimed that the prospect of a dissolution of parliament was fading. The fact that it is Lecornu speaking, and not President Emmanuel Macron, may lend credence to this view. It would be the head of state speaking to announce a dissolution.
- Instead, after meeting this afternoon with figures from the centrist/centre-right 'presidential bloc', Lecornu will hold talks with Macron at ~18:00CET on the political situation.
- Le Parisien reports that "According to our information, one scenario is holding the upper hand more than ever in recent hours: a reappointment of Lecornu [...]. "this would allow the president to [buy some] time and perhaps pass a budget before the end of the year, because that remains the priority," explains a senior figure in the executive."
- A major issue remains the prospect of the suspension of the 2023 pension reforms. A senior figure from the conservative Les Republicains has warned, "We don't see how the right could not censor a government that reverses the pension reform."
- Le Monde notes, the caretaker PM said earlier, "The public deficit target must be kept below 5%" in the next budget, or "between 4.7% and 5%." [...] The 5% figure is striking. It means that Sébastien Lecornu is prepared for the public deficit to fall by only 0.4 points of GDP in 2026, half the amount targeted by François Bayrou." A softer stance on fiscal consolidation would also be a sign of efforts to bring the Socialists on board.
BONDS: BTP/Bund edges below 80.00bps
- The BTP/Bund spread is slowly edging below the 80bps level as the Italian 10yr Futures holds onto more gains than the German Bund.
- Next immediate support comes at ~77.9bps, the September low.
