FOREX: SEK Surge Puts Price at Multiyear High, Pinching Riksbank Pricing
Mar-06 10:11
- Meanwhile, the SEK continues a streak of outperformance as a solid set of data outturns drives the currency higher still. Prelim inflation data covering February came in well ahead of expectations, further pinching Riksbank pricing across 2025. As a result, EUR/SEK has broken lower, consolidating comfortably through the 11.00 handle to print the lowest levels since late 2022.
- JPY is second only to the SEK so far Thursday, rallying on the back of the Rengo pay demand overnight. Rengo are one of the largest contributors to the Shunto bargaining round, suggesting the economy is on track for another multi-decade high pace of pay rises.
- USD/JPY has already shown through the Tuesday low, Y148.10. A clean break below here puts prices at new YTD lows and the lowest level since October. Y146.95, a Fibonacci retracement, is the next key support. In the crosses, this means EUR/JPY has reversed hard off the 100-dma resistance (Y161.41), which may put an end to the rally off last week's lows. A close below Y159.75 would confirm as such.
- GBP is nominally the poorest performer, but weakness is somewhat contained. GBP/USD remains just below the $1.2900 handle, having struck another overnight of 1.2924 during Asia-Pac trade.
- The ECB decision takes focus going forward, with consensus unanimous around a 25bps rate cut for the benchmark rate. Weekly jobless claims data provides the last look at the US labour market ahead of tomorrow's payrolls print.
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AUSTRIA AUCTION RESULTS: 3.45% Oct-30 RAGB / 3.20% Jul-39 RAGB
Feb-04 10:10
| 3.45% Oct-30 RAGB | 3.20% Jul-39 RAGB | |
| ISIN | AT0000A38239 | AT0000A3D3Q8 |
| Issue Amount | E863mln | E863mln |
| Previous | E200mln | E150mln |
| Allotted | E750mln | E750mln |
| Previous | E150mln | E150mln |
| Avg yield | 2.477% | 3.026% |
| Previous | 2.661% | 3.067% |
| Bid-to-cover | 3.45x | 2.64x |
| Previous | ||
| Bid-to-issue | 3.00x | 2.30x |
| Previous | ||
| Avg price | 105.105 | 102.992 |
| Low price | 105.090 | 101.931 |
| Pre-auction mid | 104.927 | 101.775 |
| Prev avg price | 104.157 | 101.537 |
| Prev low price | ||
| Prev mid-price | ||
| Previous date | 08-Jan-25 | 22-Oct-24 |
GILT AUCTION RESULTS: Softish 5-year gilt auction (but not terrible)
Feb-04 10:09
The lowest accepted price (LAP) a little below the pre-auction mid-price on the secondary market there. However, the 4.375% Mar-30 gilt has shrugged off the disappointment and is trading higher now.
- There was quite a concession for the auction with the price falling from above 100.46 in the 5-minutes ahead of the auction cut off window. We are still trading notably below that level and closer to the average auction price at writing.
- Not the strongest auction but still a decent volume of demand (bid to cover in excess of 3x at 3.05x).
- Weakness seen in gilt futures going into the bidding window closing too (albeit there was some downside moves in Bunds concurrently). In gilt futures we were around 92.65 5 minutes before the auction close, hit a low of 92.490 and are now back at 92.560 at writing.
EGBS: Bund call spread vs call
Feb-04 10:06
RXH5 134/135cs 1x2 bought for 4 in ~5.1k vs selling 136c at 6.5 in ~1.9k.
