FRANCE AUCTION PREVIEW: On offer next week
Jul-29 09:41
E5-6bln of LT OATs:
- 2.00% Nov-32 OAT (ISIN: FR001400BKZ3)
- 1.25% May-34 OAT (ISIN: FR0013313582)
E4.8-6.0bln BTFs:
- E2.6-3.0bln of the 12-week Oct 26, 2022 BTF
- E1.3-1.7bln of the new 23-week Jan 11, 2023 BTF
- E0.9-1.3bln of the 49-week Jul 12, 2023 BTF
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BONDS: Another fast markets start
Jun-29 09:37
- A busy start for EGBs and Bund, with futures taking their cue from some of the German regional CPI misses versus last.
- It's another 210 ticks range for the German 10yr, but are well off the sessions high, and actually drifting towards the session low at the time of typing.
- Some of the pullback has been attributed to the Spanish CPI big beat, coming at 10% vs median estimates of 8.7%, and likely some position squaring.
- Peripherals are all tighter, Greece by 4.2bps so far today.
- Gilts underperforms Bund, pushing the Gilt/Bund spread 1.2bp wider, but well within ranges.
- US Treasuries have also lagged Europe, but are nonetheless also in green territory, underpinned by the moves in Europe.
- Looking ahead, German National CPI, and out of the US sees third readings for GDP, so more focus on the US PCE.
- Still plenty of speakers are left, with ECB Schnabel, Lagarde, BoE Bailey, Swati, Fed Powell, Mester and Bullard.
- Sep Bund futures (RX) up 48 ticks at 145.66 (L: 145.27 / H: 147.37)
- Germany: The 2-Yr yield is down 3.5bps at 0.922%, 5-Yr is down 4.6bps at 1.387%, 10-Yr is down 2.5bps at 1.603%, and 30-Yr is down 2.1bps at 1.807%.
- Sep Gilt futures (G) up 10 ticks at 112.25 (L: 112.1 / H: 112.66)
- UK: The 2-Yr yield is down 3.3bps at 2.083%, 5-Yr is down 2bps at 2.122%, 10-Yr is down 1.1bps at 2.454%, and 30-Yr is up 1.2bps at 2.724%.
- Sep BTP futures (IK) up 83 ticks at 121.02 (L: 120.6 / H: 121.83)
- Sep OAT futures (OA) up 39 ticks at 136.29 (L: 135.94 / H: 137.57)
- Italian BTP spread down 4.4bps at 188.8bps
- Spanish bond spread down 1.9bps at 107.8bps
- Portuguese PGB spread down 2bps at 105.6bps
- Greek bond spread down 2.8bps at 223.3bps
- US 2-Yr yield is down 1bps at 3.0994%, 5-Yr is down 2.1bps at 3.2125%, 10-Yr is down 1.1bps at 3.1603%, and 30-Yr is down 0.5bps at 3.2736%.
- The Sep 22 T-Note future is up 11.5/32 at 117-20, having traded in a range of 116-270 to 117-125.
EUR: EURCHF nearing parity
Jun-29 09:23
- EURCHF is slowly getting towards parity, 1 pip a time.
- As noted earlier, a challenge of this level will open to the 2022 low at 0.99723, also the lowest print since January 2015.
JAPAN: Voters Split On Preferred Outcome Of Upper House Elections
Jun-29 09:22
The latest opinion polling ahead of the 10 July elections for the upper chamber of the Japanese National Diet, the House of Councillors, shows respondents divided on the preferred outcome of the vote. An almost equal number of respondents want to see PM Fumio Kishida's centre-right Liberal Democratic Party (LDP) gain seats as those who want to see the opposition make gains.
- NHK poll: Desired outcome of Upper House election: Government parties gaining seats: 24% (-), Opposition parties gaining seats: 28% (+1). +/- vs. 17-19 June 2022. Fieldwork: 24-26 June 2022. Sample size: 2,049
- NHK poll: Approval for Prime Minister Kishida Cabinet: Approve: 50% (-5), Disapprove: 27% (+2). +/- vs. 17-19 June 2022. Fieldwork: 24-26 June 2022. Sample size: 2,049
- NHK poll: Party Identification LDP: 36% (-2), Constitutional Democratic Party: 6% (+1), Ishin (Libertarian) 5% (+1), Komeito: 4.6%, No support: 34% (-), +/- vs. 17-19 June 2022, Fieldwork: 24-26 June 2022, Sample size: 2,049
Kishida's LDP and its coalition ally, the conservative Komeito party, currently hold a combined 137 seats in the 245-member House of Councillors. This is above the 123 required for a majority, but short of the 164 required for a two-thirds supermajority. The gov't already is short of a supermajority in the House of Representatives, limiting the prospect for constitutional change that has been a major political talking point in Japan over the past decade.
