US: Sentate Passes Trump's Rescissions Package, Raises Risk Of Govt Shutdown
Jul-17 07:52
The Senate has voted 51-48 to pass President Donald Trump's USD$9 billion request to cut Congression...
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STIR: Fresh Upside For Oil Drives Light Hawkish Repricing In EUR Rates
Jun-17 07:51
Headline flow continues to be dominated by the Israeli/Iranian conflict, with crude oil prices extending higher at typing and placing renewed upward pressure on EUR traded inflation metrics. Increased inflation risks have driven light hawkish repricing in the EUR front-end since last Thursday, with the 1y1y ESTR forward swap currently at 1.76%, above last Thursday’s 1.71% close.
- ECB-dated OIS continue to fully price one more 25bp cut this cycle, but trade up to 1.5bps more hawkish than yesterday’s close across the next 12 months.
- Euribor futures rallied into yesterday’s settlement window on hopes of a de-escalation in the Middle East, but have since pulled back 1.0 to 3.0 ticks through the blues.
- This morning, ECB President Lagarde wrote an Op-Ed in the FT on the opportunities for the Euro in the current environment. The themes referenced in the piece were familiar, and not market moving.
- Today’s regional calendar includes the German June ZEW survey, with comments also due from ECB’s Villeroy and Centeno.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Jul-25 | 1.911 | -1.3 |
| Sep-25 | 1.797 | -12.7 |
| Oct-25 | 1.765 | -15.9 |
| Dec-25 | 1.690 | -23.4 |
| Feb-26 | 1.677 | -24.7 |
| Mar-26 | 1.666 | -25.8 |
| Apr-26 | 1.669 | -25.5 |
| Jun-26 | 1.671 | -25.3 |
| Source: MNI/Bloomberg Finance L.P. | ||
EGB OPTIONS: Bund Put Spread seller
Jun-17 07:50
RXN5 130/129.50ps, sold at 9.5 in 2k.
JGBS: Little Movement As Ueda Speaks
Jun-17 07:47
JGB futures stuck within their Tokyo range during BoJ Governor Ueda’s post-meeting press conference, with little new for markets to digest.
- Futures firmed at the margin, with yields incrementally lower, as there were no fresh hawkish cues.
- Yields last 1-3bp higher, 10s under the most pressure.
- Cash 5s30s and 10s30s curves were also little changed as Ueda spoke, close to flat on the day at typing.
- Ueda underscored the Bank’s nimble approach, while noting that the BoJ’s bond purchase plan tweaks remove one area of variability for the MoF when it comes to any decisions surrounding issuance.
- Friday’s meeting between the MoF and primary dealers, which could result in a shortening of issuance WAM owing to the recent spike higher in long-term JGB yields, presents the domestic focal point this week.
- Ueda also stressed that the bond buying decision was centred on avoiding excess volatility in markets that could have a negative impact on the economy, pushing back on the idea that fiscal considerations were a contributing factor.
- Ueda also underscored the Bank’s data-driven approach when it comes to further tightening, albeit reiterating that the Bank will continue raising rates if its economic outlook is realised, while playing down the need for speculation on near-term decisions.
