FRANCE AUCTION PREVIEW: On offer next week
Jul-11 09:05
France has announced it will be looking to sell a combined E10-12bln of the following MT OATs at its auction next Thursday, July 17:
- the 2.40% Sep-28 OAT (ISIN: FR001400XLW2)
- the 2.50% May-30 OAT (ISIN: FR0011883966)
- the 2.70% Feb-31 OAT (ISIN: FR001400Z2L7)
France has also announced it will be looking to sell a combined E1.0-1.5bln of the following I/L OATs at another auction on that Thursday:
- the 0.60% Jul-34 OATei (ISIN: FR001400JI88)
- the 0.10% Jul-38 Green OATei (ISIN: FR001400AQH0)
- the 0.55% Mar-39 OATi (ISIN: FR001400IKW5)
Additionally, France has announced it will be looking to sell up to a combined E6.8bln of the following BTFs at its auction next Tuesday, July 15:
- E2.7-3.1bln of the 13-week Oct 15, 2025 BTF
- E1.4-1.8bln of the 26-week Jan 14, 2026 BTF
- E1.5-1.9bln of the new 52-week Jul 15, 2026 BTF
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GILT AUCTION RESULTS: 4.50% Mar-35 Gilt
Jun-11 09:03
| 4.50% Mar-35 Gilt | Previous | |
| Amount | GBP4.25bln | GBP4.25bln |
| Avg yield | 4.588% | 4.673% |
| Bid-to-cover | 2.89x | 3.13x |
| Tail | 0.3bp | 0.3bp |
| Avg price | 99.309 | 98.638 |
| Low price | 99.286 | 98.618 |
| Pre-auction mid | 99.276 | 98.645 |
| Previous date | 14-May-25 |
ECB: Further Currency Shifts May Strengthen Euro’s Global Role
Jun-11 08:57
- The ECB has published its annual report into the euro. President Lagarde’s foreword notes that:
- “The euro continued to hold its position as the second most important currency globally” in 2024.
- “Further shifts may be underway in the landscape of international currencies. The tariffs imposed by the US Administration have led to highly unusual cross-asset correlations. This could strengthen the global role of the euro and underscores the importance for European policymakers of creating the necessary conditions for this to occur.”
- “The number one priority must be advancing the savings and investment union to fully leverage European financial markets. […] The planned issuance of bonds at the EU level – as Europe takes charge of its own defence – could make an important contribution to achieving these objectives.”
- The report goes on to note that “the share of gold in global foreign reserves at market prices, at 20%, surpassed the share of the euro (16%). Survey data suggest that two-thirds of central banks invested in gold for purposes of diversification, while two-fifths did so as protection against geopolitical risk.”
- Euro strength has received close attention from policy makers since its decoupling with factors such as rate differentials, something that first started with EU/German defence and infrastructure investment plans before kicking up a gear with US reciprocal tariff announcements in April.
- The holding of relatively high EUR/USD rates (currently 1.1436) appears to have given Governing Council members added confidence that a deposit rate of 2%, reached after last week’s 25bp cut for 200bp of easing for the cycle, leaves policy in a good place with implications of a pause ahead.
- Lagarde has previously talked on the potential benefits of a growing global role. This from May 26: “Increasing the international role of the euro can have positive implications for the euro area. It would allow EU governments and businesses to borrow at a lower cost, helping boost our internal demand at a time when external demand is becoming less certain.”
US TSY OPTIONS: FVN5 107.50 Puts Now Sold
Jun-11 08:56
FVN5 107.50 puts continue to trade, with ~5K given at 0-13+ over several clips after the previously covered buying at 0-14. Volume in the contract tops 12K on the session.
