OIL PRODUCTS: Singapore Oil Stocks Rise Led by Surge in Middle Distillates

• Final guidance: 2.90% Aug-54 Bund + 20 to 21bps
• Prelim initial spread guidance yesterday was +18.5 to 22.5bps then revised to 19.5 to 22.5bps as books opened then 19.5 to 21.0bps
• Size: E4.0-5.0bln will be on offer (MNI assume takeup at the top of the target range)
• Final books in excess of E32bln
• Maturity: 15 January 2056
• ISIN: NL0015002P70
• The preliminary initial spread guidance is 2.90% Aug-54 Bund + 18.5 to 22.5bps.
• Books closed

Softer-than-expected PMI data sees gilt futures through yesterday’s top, contract as high as 91.04.

• Bulls eye first resistance at the 20-day EMA (91.11).
• Curve bull flattens a little further, yields 2.5-4.5bp lower on the day, last week’s lows still untested in 2s10s and 5s30s.
• SONIA futures flat to +2.0.
• BoE-dated OIS flat to 2.5bp more dovish on the day, showing 6.5bp of easing through year-end, with the next cut still not fully discounted until the end of the April MPC decision. Market still trades at the hawkish end of the recent range and we think underappreciates the odds of a cut through year-end.
• The caveat to that is that the PMIs noted a "solid rise in prices changed in September." That won't sound very appealing to the swing members on the MPC ahead of the Q4 decisions and will be limiting the reaction in the very front of the GBP STIR strips. Recall that we will hear from both Breeden and Ramsden in speeches in the first half of next week.
• 30-Year gilt supply eyed later given further fiscal deterioration via last week’s PSNB data, with BoE chief economist Pill also set to speak this morning (10:00 London).

• Guidance: 2.90% Aug-54 Bund + 20 to 21bps
• Prelim initial spread guidance yesterday was +18.5 to 22.5bps then revised to 19.5 to 22.5bps as books opened then 19.5 to 21.0bps
• Size: E4.0-5.0bln will be on offer (MNI assume takeup at the top of the target range)
• Books in excess of E30bln
• Maturity: 15 January 2056
• ISIN: NL0015002P70
• The preliminary initial spread guidance is 2.90% Aug-54 Bund + 18.5 to 22.5bps.
• Books to close between 9:45BST / 10:45CET