EM CEEMEA CREDIT: Romania: €BM L7Y, 12Y and 20Y
Oct-02 08:38
(ROMANI; Baa3neg/BBB-neg/BBB-neg)
IPT: L7Y MS+340A, 12Y MS+385A and 20Y MS+415A
FV: L7Y MS+300, 12Y MS+350, 20Y MS+370
- Romania Issuing € L7Y, 12Y and 20Y bonds. Romania's € curve is very granular, so we reference the curve for our FV.
- For the L7Y we reference the 2% APR33 bonds which are around z+303bp. For the 12Y we look at the 5.625% May37 bonds which are around z+343bp and also the 3.375% FEB38 bonds which are around z+345bp. For the 20Y bond we look at the 6% Sep44 bond which is around z+363bp, we also look at the 4.625% APR49 bonds which are around 364bp.
- Romania is also tendering for its €1.3bn 2.75% 26 notes, €1.8bn 5% 26 notes and €1.15bn 2% notes due 26.
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GILTS: The 4.80% Yield holds
Sep-02 08:34
- The Initial Yield Level in the UK 10yr has held perfectly, this was seen at 4.80%, which equated to 89.80, printed a 89.82 low and a 4.793% high so far on the day.
- As investors price less cut but also demand higher Yields on Borrowing cost, and Growth concerns, the next big Yield level would be seen at 4.921%, this was the 2025 high and the highest printed level since July 2008.
Today, reference 90.03:
- 4.921% = 88.75.
GERMAN AUCTION PREVIEW: 1.90% Sep-27 Schatz
Sep-02 08:32
This morning, Germany will hold a Schatz auction. On offer will be E4.5bln of the 1.90% Sep-27 Schatz.
- The E4.5bln size is in line with recent Schatz re-opens.
- Contrary to other segments of the German curve, Schatz primary demand appears to have been solid recently. The last auction on August 5 saw a 2.51x bid-to-cover (BTC) and a 1.97x bid-to-offer (BTO) - these compare to 1.69-2.92x BTC and 1.29-2.63x BTO ranges seen this year, respectively.
- Domestically, the government's fiscal plans until 2029 should be well digested by markets by now, while the focus turns towards any announcements of "structural reforms" which the coalition plans to float in autumn. The short end of the German curve meanwhile was driven this morning by an interview of hawkish-leaning ECB's Schnabel (Schnabel Interview Contains Unsurprising Hawkish Themes).
- The next German auction will be tomorrow's E5bln of the 2.60% Aug-35 Bund (ISIN: DE000BU2Z056), while the 1.90% Sep-27 Schatz will be next re-opened on 23 September, for E4.5bln.
- Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.
EUROPEAN INFLATION: HICP tracking at 2.0% with marginal downside risks
Sep-02 08:25
With the majority of Eurozone countries having now released flash HICP prints (summing to 92.4% of the Eurozone total) we track the pan-Eurozone print at 2.0% with slightly risks skewed marginally to the downside (albeit we have to calculate some of the tracking from rounded figures so there is still a chance of a 2.1% print in line with the Bloomberg consensus).
