ILS: Shekel Continues To Weaken Amid Diplomatic Tensions
May-22 09:43
Spot USD/ILS last changes hands +96 pips at 3.5725, extending its recovery from cyclical lows for the second day in a row. Bulls look for further gains towards the 100-DMA (3.6232). On the flip side, the focus is on May 20 low of 3.5144.
- Tensions between Israel and its Western partners over the Tel Aviv's operations in Gaza have been steadily escalating, spilling over to more areas of bilateral cooperation.
- Israel's average 12-month ahead CPI forecast was +2.4% Y/Y, while one-year inflation expectations derived internal interest rates was +2.1% Y/Y.
- The Bank of Israel will deliver its next monetary policy decision on Monday. All five economists polled by Bloomberg so far said they expect an on-hold decision.
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DUTCH T-BILL AUCTION RESULTS: DTC Results
Apr-22 09:42
| Type | 2.5-month DTC | 5.5-month DTC |
| Maturity | Jun 27, 2025 | Sep 29, 2025 |
| Amount | E1bln | E1.01bln |
| Target | E1.0-1.5bln | E1.0-2.0bln |
| Previous | E1.33bln | E1.27bln |
| Avg yield | 2.105% | 2.002% |
| Previous | 2.322% | 2.263% |
| Bid-to-cover | 2.71x | 2.24x |
| Previous | 2.08x | 2.2x |
| Previous date | Mar 17, 2025 | Mar 17, 2025 |
SLOVAKIA AUCTION RESULTS: SlovGBs
Apr-22 09:39
| Coupon | 3.00% | 3.75% | 3.75% | 2.00% |
| Maturity | Feb-28 | Mar-34 | Feb-35 | Oct-47 |
| Instrument | SlovGB | SlovGB | SlovGB | SlovGB |
| ISIN | SK4000024683 | SK4000024865 | SK4000022539 | SK4120013400 |
| Amount | E77mln | E242mln | E255mln | E61mln |
| Previous | E136mln | E82mln | E231mln | E322mln |
| Avg yield | 2.082% | 3.382% | 3.437% | 4.002% |
| Previous | 2.424% | 3.569% | 3.668% | 3.931% |
| Bid-to-cover | 2.78x | 3.06x | 2.38x | 1.82x |
| Previous | 2.17x | 3.62x | 2.04x | 2.13x |
| Avg Price | 102.461 | 102.768 | 102.568 | 70.668 |
| Low Price | 102.400 | 102.716 | 102.450 | 70.400 |
| Pre-auction mid | 102.360 | 102.584 | 102.448 | 71.199 |
| Prev avg price | 101.628 | 101.363 | 100.668 | 71.380 |
| Prev low price | 101.550 | 101.320 | 100.566 | 71.266 |
| Prev mid-price | 101.515 | 101.134 | 100.460 | 71.036 |
| Previous date | 17-Feb-25 | 17-Mar-25 | 17-Mar-25 | 17-Feb-25 |
GILTS: Steepening Develops Further, 5s30s Pierce Cycle Closing Highs
Apr-22 09:37
Gilts twist steepen, with cues from Tsys driving much of the price action. U.S. policy uncertainty continues to dominate newswires.
- Futures 92.20 last (91.96-40 range).
- Initial support and resistance unchanged at 91.73/92.63.
- Yields 3bp lower to 6bp higher, curve twist steepens.
- Long end yields still 20-30bp off April closing highs.
- 2s10s ~9bp below closing cycle highs, last 69.7bp.
- 5s30s testing cycle closing highs, last 135.7bp. If we break higher, there is little resistance to note until 150bp.
- Risks seem titled towards continued steepening given the UK’s economic and fiscal fragility, while the macro environment adds further weight to that view.
- BoE-dated OIS shows 89bp of cuts through year-end after briefly printing ~91bp this morning.
- BoE MPC member Greene didn't use any of the recent MPC buzzwords ("careful", "cautious" or "gradual") when describing her forward-looking view in an interview with BBG TV, perhaps signalling a move away from her traditional position at the hawkish end of the MPC spectrum. Markets looked through this given the recent dovish repricing.
- Post-holiday adjustments and macro cues are set to remain at the fore today.
- Wednesday will see Brightmine wage data, PMIs and public finance data cross. The DMO will provide an updated DMO remit revision in the wake of the latter. We will provide greater colour on this later today.
- BoE-speak from Bailey, Pill & Breeden is also scheduled for Wednesday.
