GILTS: Pullbacks Remain Shallow, Outperformance Vs. Bunds Extends
Dec-03 16:07
A pullback in Tsys spills over to gilts before fading in more recent trade. UK yields remain little changed to 5bp lower on the day, with the long end outperforming.
- Futures have filled Monday’s opening gap lower, with bulls remaining in technical control. Contract trades as high as 91.76.
- Initial support and resistance in the contract remain located at 90.87 & 91.93, respectively.
- Outperformance vs. Bunds develops further, with the 10-Year yield spread set to close below 170bp for the first time this year. Gilt bulls now eye the September ’24 closing low (~162bp).
- Long end outperformance vs. swaps noted and detailed earlier, with the 30-Year spread set to close above -75bp for the first time this year. Bulls now target the resistance cluster at -70b, -69.96bp and -69.71bp.
- While medium-term fiscal risks remain evident (with a particular focus on the backloaded nature of the fiscal tightening outlined in the Budget) the market has welcomed the (questionable) increase in fiscal headroom and ongoing WAM reduction in issuance, promoting swap spread widening. It seems that a fresh gilt-negative catalyst is a pre-requisite for any fresh spread narrowing at this point e.g. slower-than-envisaged UK growth, political unrest or fresh questions surrounding the UK fiscal outlook.
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US STOCKS: Early Equities Roundup: Tech Stocks Buoy Nasdaq
Nov-03 15:55
- Stocks have reversed early morning gains Monday, are trading mostly weaker by midmorning - the tech-heavy Nasdaq outperforming.
- Currently, the DJIA trades down 243.74 points (-0.51%) at 47327.76, S&P E-Minis down 2.75 points (-0.04%) at 6873
Nasdaq up 98.6 points (0.4%) at 23829.47. - Consumer Discretionary and Information Technology sector shares led advances in the first half, Amazon.com +4.73%, Tesla +2.46% and Wynn Resorts +2.22% led the former while IT supported by: Micron Technology +4.24%, NVIDIA +2.61%, Lam Research +1.51%, Palantir Technologies +1.29% and Cisco Systems +1.20%.
- Conversely, a mix of Materials, Financials and Energy sector shares led declines in the first half:
- International Paper -4.24%, Dow Inc -3.46%, Eastman Chemical -3.06% Freeport-McMoRan -2.83%, Nucor Corp -2.75%.
- Coinbase Global -3.75%, Arthur J Gallagher -3.70%, Global Payments -3.51% and Brown & Brown -3.26%
- ONEOK -4.01%, Diamondback Energy -2.28%, APA -2.25% and Chevron Corp -2.17%.
- Earnings expected after the close include: Qorvo Inc, Clorox, Navitas Semiconductor, Hims & Hers Health Inc, Palantir Technologies, Solaris Energy Infrastructer, Williams Cos, Vertex Pharmaceuticals and Comstock Resources.
OPTIONS: Expiries for Nov4 NY cut 1000ET (Source DTCC)
Nov-03 15:54
- EUR/USD: $1.1475(E651mln), $1.1525(E1.1bln), $1.1635-40(E1.3bln)
- GBP/USD: $1.3150(Gbp510mln)
- AUD/USD: $0.6625-30(A$1.2bln)
ITALY AUCTION PREVIEW: MEF announces buyback on Wednesday 5 November
Nov-03 15:45
The MEF will look to buyback up to E5.0bln on Wednesday 5 November via Banca d'Italia from the following:
- 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302)
- 4.50% Mar-26 BTP (ISIN: IT0004644735)
- 3.80% Apr-26 BTP (ISIN: IT0005538597)
- 2.10% Jul-26 BTP (ISIN: IT0005370306)
- 3.85% Sep-26 BTP (ISIN: IT0005556011)
- 0.50% Apr-26 CCTeu (ISIN: IT0005428617)
