EU CREDIT SUPPLY: Smiths Group: IPT

This morning, Germany will hold a Bobl auction. On offer will be E4.5bln of the 2.20% Oct-30 Bobl.

• The size is in line with the last re-open of this issue on September 16.
• Recent auctions in the German Bobl segment haven't seen particularly strong demand metrics but the segment arguably has fared better than others on the German curve when looking at bid-to-cover and bid-to-offer ratios. In 2025, Bobl auction bid-to-covers came in between 1.23x to 2.52x, and bid-to-offers between 0.95x to 1.91x, respective 1.93x / 1.47x ratios reached in the September 16 auction were towards the higher end of these ranges. Low prices have been above the secondary market mid-prices throughout 2025.
• The next German auction will be next tomorrow's 15-year auction with E1bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) and E1bln of the 3.25% Jul-42 Bund (ISIN: DE0001135432) on offer.
• The 2.20% Oct-30 Bobl will be reopened next on October 28.
• Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.

Gilts sell off on the global cues detailed in recent bullets covering weakness in wider core global FI markets before stabilising off lows.

• Futures respect yesterday’s low ta 90.41, last -20 at 90.45.
• Bears remain in technical control, with initial support and resistance still located at 90.26 & 91.28.
• Yields 0.5-2.0bp higher, curve steeper.
• 10s last ~4.75%, still operating within the multi-week 4.60-4.80% closing range.
• Light hawkish moves in GBP STIRs given moves further out the curve, SONIA futures flat to 2.0 lower, BoE-dated OIS pricing just under 5bp of easing through year-end.
• The DMO will sell GBP1.25bln of the 0.125% Jan-28 gilt via PGT this morning.
• Little else of note on the UK calendar.
• Fiscal matters continue to dominate domestic news flow.
• Former BoE MPC member Saunders told BBG that inflation will provide the government with a net GBP5bln of additional revenue, although that is hardly positive news for households.

BNP (17th Oct) 80p vs (21st Nov) 76p, bought the Oct for 1.55 in 1.25k.