FRANCE AUCTION RESULTS: No Alarm Bells For French Debt Demand At Today's LT Sale
Sep-04 09:13
Overall, no major alarm bells regarding demand for French debt at today’s auction. The top of the E9.5-11.0bln range was sold, with the sale unsurprisingly skewed towards the new 3.50% Nov-35 OAT. The 10-year OAT/Bund spread didn’t move much following the publication of the results, but has since tightened a touch to 79.3bps (-0.5bps today).
- The 10-year launch attracted a 2.18x bid-to-cover ratio for the E7.261bln issued. That’s below the 2.32x seen at the last re-opening of the previous on-the-run 10-year OAT (the 3.20% May-35 line), where E7.674bln was sold.
- It’s also slightly softer than the launch of the 3.20% May-35 OAT back in February, where a 2.23x cover was seen for the E8.641bln issued.
- The 15- and 30-year lines saw decent results. The stop prices were comfortably above pre-auction mid prices, even if the bid-to-cover ratios were a little weaker than the previous outing.
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EUROPEAN INFLATION: PPI ex-Energy Moderates But With Mixed Drivers
Aug-05 09:11
Eurozone PPI inflation was as expected in June on a Y/Y basis at 0.6% after 0.3% in May, despite a small miss for the M/M at 0.8% (cons 0.9) after -0.6% M/M - all NSA data.
- Energy PPI deflation slowed from -1.5% in May to -0.1% Y/Y (highest since March) amid a firm 3.2% M/M jump in the category.
- PPI ex-energy inflation meanwhile eased from 1.1% to 0.9% Y/Y for the lowest rate since November.
- Across the non-energy categories, Y/Y rates were mixed vs May: Non-durable consumer goods at 2.0% (1.9% May), durable consumer goods at 1.5% (1.4% May), and capital goods stayed put at 1.7%. Intermediate goods meanwhile moved into negative territory, at -0.1% Y/Y (0.2% May) for the first time since last November (at least before potential revisions to the data).
- Whilst there recently appears to be only limited impact of disinflationary effects from potential Chinese goods re-routing to Europe under Trump administration trade policy, the further moderation in intermediate goods inflation is worth watching. That said, whilst small parcel taxes have been considered in some countries such as France as a possible anti-dumping measure, we note that industrial prices of consumer goods are still growing more solidly.
AUSTRIA AUCTION RESULTS: 2.90% Feb-33 RAGB / 2.95% Feb-35 RAGB
Aug-05 09:09
| 2.90% Feb-33 RAGB | 2.95% Feb-35 RAGB | |
| ISIN | AT0000A324S8 | AT0000A3HU25 |
| Issue Amount | E748mln | E690mln |
| Previous | E250mln | E978mln |
| Allotted | E650mln | E600mln |
| Previous | E0mln | E850mln |
| Avg yield | 2.704% | 2.917% |
| Previous | 2.701% | 3.008% |
| Bid-to-cover | 2.17x | 3.09x |
| Previous | 2.57x | |
| Bid-to-issue | 1.89x | 2.69x |
| Previous | 2.24x | |
| Avg Price | 101.310 | 100.257 |
| Low Price | 101.250 | 100.211 |
| Pre-auction mid | 101.047 | 99.926 |
| Prev avg price | 101.354 | 99.506 |
| Prev low price | 99.490 | |
| Prev mid-price | 99.206 | |
| Previous date | 20-Jun-25 | 08-Jul-25 |
GILT AUCTION RESULTS: Solid 10-year Gilt Auction
Aug-05 09:06
- That’s the tightest tail (0.1bp) and highest bid-to-cover ratio (3.33x) the 4.50% Mar-35 Gilt has seen across six re-openings since March.
- Lowest accepted price of 99.823 also well above the 99.7745 pre-auction mid-price.
- The secondary market price of the Gilt has moved up to 99.869 at typing, with Gilt futures also gaining ~14 ticks since the results were published, now -5 ticks today at 92.63.
