RIKSBANK: Updated Equity Injection Request At SEK25
The Riksbank has submitted an updated request for a capital injection from the Riksdag of SEK25bln. See press release here.
The original request submitted to the Riksdag in March looked for an injection of SEK43.7bln, though this petition also noted that "an alternative could be to divide the restoration over two years so that the Riksbank's equity is restored in 2025 to the base level applicable at that time. This would provide a more solid foundation for the Riksbank to build up equity to the target level in the long term".
From the latest press release, "The Committee on Finance also proposes two announcements to the Government for amendments to the Sveriges Riksbank Act, partly with the aim of strengthening the Riksbank's possibilities for self-financing."...though more detailed comments are not available.
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EGBS: Bunds Stabilise Ahead Of Support Cluster, BTP Syndi Demand Provides Some Relief After Valore
Bund futures move nearer to the clustered support zone (130.50-60), printing as low as 130.66 before stabilising around 130.70.
- German cash yields are flat to 1.5bp higher on the day, as the curve steepens a little. 2s10s & 5s30s stick within recent ranges.
- This morning’s ZEW data was firmer than-expected, although Bunds had already turned away from highs alongside gilts, as some light dovish moves following BoE comments faded.
- The swelling IG issuance slate has helped keep a lid on rallies, even with sovereign auctions passing smoothly and the now almost customary round of sizeable demand seen at the latest EU & EGB syndications.
- Solid to strong demand at the green BTP syndication provides some light relief after the softer-than-normal retail demand at last week’s Valore offering. This helps peripherals to print little changed to a touch tighter vs. Bunds.
- A reminder that most sell-side desks deemed any headwinds for retail demand as a second order risk for BTPs in the immediate term (at most). Overall funding worries are subdued and the focus on the seemingly impending start to the ECB’s rate cutting cycle have provided insulation during recent BTP spread widening episodes.
- Hedging of the syndications will be eyed around pricing.
STIR: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 5.31% (+0.00), volume: $1.805T
- Broad General Collateral Rate (BGCR): 5.30% (+0.00), volume: $719B
- Tri-Party General Collateral Rate (TGCR): 5.30% (+0.00), volume: $702B
- (rate, volume levels reflect prior session)
GILT PAOF RESULTS: GBP22.850mln of the 0.125% Mar-73 linker sold
- A total of GBP150.0mln had been available.
- This leaves GBP5.023bln of the gilt in issue.
