EM CEEMEA CREDIT: SIB: AT1 Sukuk deal priced

Voting is now underway across all of Canada in an election contest dominated by the severe deterioration in relations with the United States. Earlier, US President Donald Trump posted on Truth Social regarding the election, calling on voters to "Elect the man who has the strength and wisdom to cut your taxes in half, increase your military power, for free, to the highest level in the World, have your Car, Steel, Aluminum, Lumber, Energy, and all other businesses, QUADRUPLE in size, WITH ZERO TARIFFS OR TAXES, if Canada becomes the cherished 51st. State of the United States of America." 

• At the start of the year, the main opposition centre-right Conservatives looked all but certain to return to power for the first time since 2015. Then-PM Justin Trudeau had poor approval ratings, and the main topic of the election was the high cost of living, shortages of housing, and immigration, which saw public anger directed at the incumbents.
• However, Trudeau's resignation and replacement as PM by Mark Carney, combined with Trump's tariff imposition and increasingly aggressive rhetoric towards the very notion of a Canadian nation has bolstered the centre-left Liberals. A 'rally round the flag' effect has seen Carney's party become strong favourites to expand their seat total and govern as a majority for the first time since 2019.
• Polls close across most of Canada at 2130ET, with the last areas in the Pacific timezone closing at 2200ET. Exit polls are not commonly carried out in Canada, but early results should start filtering through a short time afterwards. 

Chart 1. Federal Election Opinion Polling, % and 8-Poll Moving Average

Source: Liaison Strategies, Mainstreet Research, Nanos Research, Abacus Data, Innovative Research, Angus Reid, Pollara, MQO Research, Leger, Research Co., Ekos, Ipsos, Pallas Data, MNI

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Gilts have recovered from session lows alongside wider core global FI markets.

• While the latest round of broader FI selling seemed to be driven by news that Ukraine has tabled a full ceasefire with Russia, to last at least 30 days, scepticism surrounding the odds of such a deal lasting limited the move lower.
• The bullish technical phase remains intact, initial support and resistance in futures at 92.22/93.34 not breached, contract last 92.91.
• Yields 2-6bp higher, curve steeper.
• 2s10s ~15bp below cycle closing highs, last 63.5bp.
• 5s30s ~11bp below their own cycle closing peak, last ~127.5bp.
• Curves flattened ahead of the BoE’s short bucket APF sale, which saw a downtick in the cover ratio. Limited reaction on curves since, although yields have edged higher.
• Goldman Sachs still believe that “the UK long-end is cheap relative to other curve points and to peers, with a larger-than-normal deviation from the typical relationship to G4 yields. This indicates there is still limited progress towards improving the risk correlations of Gilts as a safe haven asset, but we ultimately think a relaxation of the inflation constraint will allow for long-end outperformance over time”.
• Modest hawkish drift in GBP STIRs alongside the intraday downtick in gilts.
• BoE-dated OIS still shows ~88bp of cuts through December vs. closer to 90bp this morning, next 25bp step still fully discounted for May.
• SONIA futures +0.5 to -1.5.