CHINA: PBoC Again Stress Need of Strengthening Rate Policy Implementation
Mar-21 10:50
The PBOC state they are to strengthen the coordination of monetary and fiscal policy, and recommend increasing the intensity of monetary policy. They add that they will cut the Reserve Requirement Ratio and rates at an appropriate time.
Nothing too far outside of expectations from the PBOC here (hence no reaction in CNH) - this is their quarterly monetary policy meeting - so not publicised, but not totally unexpected here.
- Expectations continue to build for a RRR cut this year - even in the China Securities Daily overnight there was a piece citing analysts on seeing further rate cuts (potentially RRR, LPR or both) across 2025.
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EGBS: Bund Futures Pressured By Supply, Oil Uptick; Spreads Widen
Feb-19 10:38
Bund futures are -35 ticks at 131.75, pressured by this morning 10-year German supply and an uptick in crude oil futures.
- EGBs have been happy to look through US President Trump’s overnight tariff threats on Auto, Drug, Chip Imports, while the mixed UK CPI report this morning also saw little reaction.
- The German curve has bear steepened, with 2-year yields up 1.5bps and 30-year yields over 3bps higher.
- The 10-year Bund auction was digested smoothly, with the lowest accepted price of 99.77 in excess of the 99.745 pre-auction mid.
- 10-year peripheral spreads to Bunds have extended earlier widening, with European equity futures pulling at typing. The BTP/Bund spread is 1.5bps wider at 107bps, after marking a fresh year-to-date low of 104bps yesterday.
- ECB dove Panetta provided characteristically dovish commentary around weak growth prospects this morning.
- Regional focus remains on Friday’s flash PMIs, while the FOMC minutes headlines today’s global macro calendar.
PORTUGAL T-BILL AUCTION PREVIEW: 11-month BT
Feb-19 10:33
| Type | 11-month BT |
| Maturity | Jan 16, 2026 |
| Amount | E1bln |
| Target | E0.75-1.00bln |
| Previous | E1bln |
| Avg yield | 2.27% |
| Previous | 2.42% |
| Bid-to-cover | 2.22x |
| Previous | 2.67x |
| Previous date | Jan 15, 2025 |
GERMAN AUCTION RESULTS: 2.50% Feb-35 Bund
Feb-19 10:32
| 2.50% Feb-35 Bund | Previous | |
| ISIN | DE000BU2Z049 | |
| Total sold | E4.5bln | E4.5bln |
| Allotted | E3.47bln | E3.439bln |
| Avg yield | 2.52% | 2.54% |
| Bid-to-offer | 2.13x | 2.17x |
| Bid-to-cover | 2.76x | 2.84x |
| Average Price | 99.78 | 99.67 |
| Low acc. Price | 99.77 | 99.67 |
| Pre-auction mid | 99.745 | 99.635 |
| Previous date | 29-Jan-25 |
