STIR: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 5.34% (+0.01), volume: $2.011T
- Broad General Collateral Rate (BGCR): 5.32% (+0.00), volume: $796B
- Tri-Party General Collateral Rate (TGCR): 5.32% (+0.00), volume: $773B
- (rate, volume levels reflect prior session)
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GLOBAL POLITICAL RISK: Week Ahead 24-30 June
MNI's Political Risk team has published its latest Week Ahead article, looking at some of the major political events taking place over the coming seven days. Includes info on Biden and Trump facing off in first debate of 2024 campaign; first round of French legislative election taking place as National Rally seek strong showing; and EU leaders meeting with the aim of agreeing on Commission, Council and Foreign Policy rep candidates.
Full article PDF attached below:
EGBS: Little Reprieve For OATs Vs. Iberian Paper, Even As OATs/Bunds Narrows A Little
10-Year OAT/Bunds edges away from last week’s multi-year closing wides as weekend risk premium comes out of French paper. However, there hasn’t been much respite for OATs on an equally weighted fly vs. 10-Year SPGBs & PGBs.
- Iberian fiscal & sovereign credit rating trajectories keep that fly at levels not seen since pre-GFC times, with little reason to fade the move at this juncture.
- There wasn’t any meaningful movement in the French political situation over the weekend, with RN cementing their opinion poll advantage ahead of the first round of voting in the French lower house elections (Sunday 30 June).
- Macron’s party trails both RN & the leftist bloc in the opinion polls, increasing the risk of political & fiscal paralysis, with French fiscal angst already heightened.
- Le Pen has suggested that Macron may need to resign if political paralysis becomes apparent, Macron has played this idea down on several occasions.
- Some pollsters have suggested that RN may achieve an absolute majority in the lower house, although the two-stage polling system complicates projections.
- Potential lower house governing agreements between the left & right have also been touted in the case that a party/group fails to win an absolute majority. This seems quite unlikely to us at this stage, with that idea limited to some political watchers as opposed to the mainstream/parties.
- Any such governing alliance would likely trigger further OAT spread widening, given the uncertainty related to the stark opposing views of the parties when it comes to key policy pillars.
Fig. 1: 10-Year SPGB/OAT/PGB Butterfly (bp)
Source: MNI - Market News/Bloomberg
Fig. 2: POLITICO Poll Of Polls - France
Source: POLITICO
FOREX: Barclays' Month-End Model Eyes Strong USD Sales
- Barclays' month-end model shows strong USD selling against most major currencies, however quarter-end flows are seen as relatively muted.
- The overall signal is strong, but is between moderate/strong in the case of NOK and SEK. The month-end signal is driven mainly by the continued rally in US equities, while ex-US markets are more stagnant.
