STIR: SFIM6/Z6/M7 Fly Could Be USed To Hedge Iran Reescalation
Apr-09 10:50
SONIA futures have moved to indicate both a flatter BoE hiking cycle through the end of ’26 and less pronounced cutting cycle in ‘27 in recent sessions, as pricing surrounding Iran conflict escalation moderated.
- However, high level conviction for a positive outcome at the impending U.S.-Iran talks is lacking as both sides continue to hold differing stances on the ceasefire agreement and post-conflict demands. This has factored into bearish repricing today.
- Israeli strikes on Hezbollah/Lebanon are ongoing, which has prolonged difficulties when it comes to energy product flow through the Strait of Hormuz, maintaining some degree of stagflationary risk.
- Those looking for reescalation/an adverse scenario come the end of the U.S.-Iran talks could look to pay the wings of the SFIM6/Z6/H7 fly, which trades a little over 30bp below its March peak.
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GILT SYNDICATION: 4.625% Mar- 37 Green Gilt: Allocations
Mar-10 10:47
- Spread set: 4.25% Mar-36 gilt +10.75bps (guidance was +10.75/+11.25bps)
- Size: GBP6.25bln WNG (MNI expected GBP6.0-6.5bln)
- Books closed in excess of GBP80bln (inc JLM interest of GBP6bln)
- HR 109% vs 4.25% Mar-36 gilt (GB0032452392)
- Maturity: 7 March 2037
- Coupon: 4.625%, short first
- Settlement: 11 March 2026 (T+1)
- ISIN: GB00BVP99905
- Bookrunners: Barclays, BNP Paribas, Citi, HSBC (B&D/DM), J.P. Morgan and NatWest
- Timing: Hedge deadline 11:10GMT
From market source with MNI colour
BOE: ILTR net usage highest for 8 weeks
Mar-10 10:44
- Gross takeup: GBP4.452bln
- Net takeup: GBP1.427bln to new record GBP72.631bln (has been a new record in each of the past 10 operations now.
COMMODITIES: USD Firms as IRIB Reports Explosion of Oil Tanker Near Abu Dhabi
Mar-10 10:40
"*IRAN'S IRIB: EXPLOSION OF AN OIL TANKER NEAR ABU DHABI" - bbg
- Oil higher here on the back of that headline, helping provide some support to the USD, while weighing on equities. Bund futures have also responded, prompting a new session low at 126.90.
- Details light at the moment, with that headline reported by IRIB, Iran's state broadcaster. Were earlier reports from other maritime organisations, but this headline the most descriptive so far.
