CANADA: RBC On Notable Issuance Developments
- Planned conventional bond issuance of C$172B for 23/24 was higher than our expectations, though below the C$185B in FY22/23.
- There were meaningful changes in each sector, with the cancellation of 3’ s after the two upcoming auctions being the most notable, whilst higher front-end and lower back-end issuance were a general feature.
- The market reaction saw 2s30s move almost 5bp flatter post announcement (to -70bp) and CA/US 30y spreads 3bp tighter to -74bp.
- Another major development is the government looking at rolling CMHC’s Canada Mortgage Bond (CMB) program (C$40bn/year) into the GoC borrowing program. Details are sparse though, awaiting with updates due for the Fall update.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Under pressure
- EGBs and gilts are under some pressure this morning with Schatz and Bunds seemingly leading the moves. There are no real obvious headline drivers for the moves, other than the potential Brexit deal which is expected to be announced later today - but that does not seem to be the catalyst as we are still very light on details.
- SONIA / Euribor futures have also moved notably lower this morning - with Mar-24 SONIA seeing a 10 tick move on the day.
- The main release of the day will be US durable goods data at 13:30GMT / 8:30ET.
- The most interesting speech of the day is likely to come from the Fed's Jefferson who is dual to discuss inflation and the dual mandate. We will also from BOE's Broadbent and the ECB's de Cos and Lane (although none of those are due to discuss monpol).
- TY1 futures are down -0-4+ today at 110-25 with 10y UST yields up 1.3bp at 3.960% and 2y yields up 2.6bp at 4.843%.
- Bund futures are down -0.31 today at 133.74 with 10y Bund yields up 2.8bp at 2.562% and Schatz yields up 2.3bp at 3.044%.
- Gilt futures are down -0.26 today at 100.25 with 10y yields up 2.0bp at 3.780% and 2y yields up 4.8bp at 3.654%.
GILTS: Approaching Friday's lows
Gilt futures now approaching the Friday low of 100.93, currently trading at 101.00 at time of writing writing.
EQUITIES: E-Mini S&P Recovers Towards 4000.00 After Slipping to Feb Low Friday
Eurostoxx 50 futures finished near the lows of the week, with the 4175 level the lowest print since early February. Last week, dip buyers emerged on Wednesday to contain any break lower, but the shallow bounce off the Friday lows suggests a lower range to begin the week. Key support remains at 4097.00, the Jan 19 low. Major resistance holds at 4303.20, the 2.382 proj of the Sep 29 - Oct 4 rise from Dec 20 low. Further slippage Friday put the S&P E-Minis to fresh February lows, with weakness extending through the close. Last week’s price action put prices below first support at the 50-day EMA at 4024.94 and tilts the near-term view lower. 3901.75 marks next support, the Jan 19 low, although vol band support at 3940.3 could slow any decline. For the outlook to improve, bulls look for a close above the mid-week high at 4034.25.
- Japan's NIKKEI closed lower by 29.52 pts or -0.11% at 27423.96 and the TOPIX ended 4.38 pts higher or +0.22% at 1992.78.
- Elsewhere, in China the SHANGHAI closed lower by 9.126 pts or -0.28% at 3258.034 and the HANG SENG ended 66.53 pts lower or -0.33% at 19943.51.
- Across Europe, Germany's DAX trades higher by 222.42 pts or +1.46% at 15432.17, FTSE 100 higher by 65.48 pts or +0.83% at 7943.98, CAC 40 up 109.15 pts or +1.52% at 7296.42 and Euro Stoxx 50 up 70.91 pts or +1.7% at 4249.73.
- Dow Jones mini up 147 pts or +0.45% at 32971, S&P 500 mini up 20.75 pts or +0.52% at 3996.25, NASDAQ mini up 80 pts or +0.67% at 12076.25.
