GBP: Sell-side Sees Few Gamechangers in BoE Decision, EUR/GBP Risk is Higher

German ASWs vs. 3-month Euribor are flat to +0.8bp on the day, with outperformance noted in the long end despite the bear steepening seen on the outright bond curve.

• ASWs tick further away from the multi-week lows registered in early May, with bears unable to force a retest of cycle/all-time lows as of yet.
• It could be that the combination of the recent sell off in spreads has found a bit of a limit, with little in the way of fresh catalysts to promote further cheapening vs. swaps, allowing ASWs to move away from pullback lows in recent sessions.
• The medium-term fundamental outlook still screens bearish for long end spreads, but ongoing macro uncertainty means that volatility should persist.

• Date $MM Issuer (Priced *, Launch #)
• 07/20 $Benchmark Siemens 3Y +65a, 3Y SOFR, 5Y +80a, 7Y +90a, 10Y +100a, 30Y +115a, 40Y +125a
• 07/20 $1.5B Rentenbank 5Y SOFR+42
• 07/20 $Benchmark NatWest 4NC3 SOFR+135a, 6NC5 +135a
• 07/20 $Benchmark McKesson 5Y +85a, 7Y +95a, 10Y +105a
• 07/20 $Benchmark Snam 5Y +135a, 10Y +160a, 30Y +185a
• 07/20 $Benchmark Texas Instruments 5Y +65a, 10Y +85a
• 07/20 $Benchmark Kommunalbanken +5Y SOFR+53
• 07/20 $Benchmark Pricoa 5Y +95a, 10Y +115a
• 07/20 $Benchmark Kenvue Inc 7Y +90a
• 07/20 $Benchmark ADB 5Y SOFR+45
• 07/20 $Benchmark OKB 3Y
• $8.6B Priced Monday

• FRBNY EFFR for prior session:
  • Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $116B
  • Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $299B
• Repo Reference Rates
  • Secured Overnight Financing Rate (SOFR): 4.29% (-0.01), volume: $2.570T
  • Broad General Collateral Rate (BGCR): 4.28% (-0.01), volume: $1.059T
  • Tri-Party General Collateral Rate (TCR): 4.28% (-0.01), volume: $1.018T
  • (rate, volume levels reflect prior session)