FOREX: Souring Sentiment Helps USD Index Extend Weekly Advance to 1.35%
* The US dollar has continued to trade at firmer levels this week, supported both by the lack of p...
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GERMAN AUCTION RESULTS: LT Bunds
| 1.25% Aug-48 Bund | 0% Aug-52 Bund | 2.90% Aug-56 Bund | |
| ISIN | DE0001102432 | DE0001102572 | DE000BU2D012 |
| Total sold | E1.5bln | E500mln | E1bln |
| Allotted | E1.261bln | E463mln | E779mln |
| Previous | E786mln | E860mln | E1.148bln |
| Avg yield | 3.55% | 3.57% | 3.58% |
| Previous | 3.18% | 3.42% | 3.45% |
| Bid-to-offer | 1.44x | 1.50x | 1.13x |
| Previous | 1.20x | 1.40x | 1.31x |
| Bid-to-cover | 1.72x | 1.62x | 1.45x |
| Previous | 1.53x | 1.63x | 1.71x |
| Avg Price | 64.93 | 39.75 | 87.49 |
| Low Price | 64.90 | 39.71 | 87.48 |
| Pre-auction mid | 64.851 | 39.751 | 87.444 |
| Prev avg price | 68.97 | 41.20 | 89.70 |
| Prev low price | 68.97 | 41.19 | 89.66 |
| Prev mid-price | 68.864 | 41.127 | 89.645 |
| Previous date | 17-Sep-25 | 25-Mar-26 | 18-Mar-26 |
GILTS: Back From Early Highs
Gilts have faded from highs, with ongoing signals of U.S. forces manoeuvring around the Gulf limited any pullbacks in crude linked to optimism surrounding the potential for U.S.-Iran talks in the immediate term.
- Gilt futures +9 at 88.98, fading from early highs of 89.31.
- Bulls still need to force a break of the April 9 high (90.21) to provide a more meaningful risk to the bearish technical backdrop.
- Yields are little changed across the curve.
- Bulls need to see clear breaks below March 18 lows across benchmark yields to negate some of the bearish technical theme.
- Energy price swings linked to the situation in the Middle East will continue to dominate matters in the immediate term. Positive steps towards de-escalation would be supportive of bull steepening patterns on the curve, while negative developments would reintroduce bear flattening.
- BoE-dated OIS pricing ~37bp of hikes through year-end vs. a little under 45bp early yesterday and 40bp before yesterday’s dovish comments from ECB’s Lagarde spilled over.
- BoE Governor Bailey will speak again today. One of his appearances will cover stablecoins, while the other will cover global imbalances.
- HE remained non-committal when it comes to the monetary policy outlook when he spoke on Tuesday.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Apr-26 | 3.770 | +4.1 |
Jun-26 | 3.866 | +13.7 |
Jul-26 | 3.970 | +24.0 |
Sep-26 | 4.054 | +32.5 |
Nov-26 | 4.088 | +35.8 |
Dec-26 | 4.099 | +36.9 |
Feb-27 | 4.098 | +36.9 |
Mar-27 | 4.091 | +36.2 |
Apr-27 | 4.080 | +35.1 |
EGBS: Bund Futures Close To Session Lows, Trend Structure Still Bearish
Bund futures are trading close to session lows, but remain 10 ticks above yesterday’s settlement levels at 125.42. There was limited reaction to AP reports that mediators’ efforts to extend a ceasefire between the United States and Iran have made progress.
- Overall, the trend structure in Bund futures remains bearish and the move down from the Apr 8 high reinforces this bear theme. The focus is on key short-term support and the bear trigger at 124.25, the Mar 27 low.
- The curve has marginally bull steepened. The 10-year Bund yield remains just above the 3.00% figure.
- 10-year EGB spreads to Bunds are up 1bps to 76.5bps. Italy is holding a dual tranche syndication today, including a new 10-year BTP. The 10-year has seen record order books of E159bln, with the auction size set at the top-end of MNI’s expectations (E14bln).
- Germany also held a triple-line LT Bund auction this morning, while Greece sold a 10-year GGB.
- Eurozone industrial production was a little less negative than expected (-0.6% M/M vs -1.0% cons), but not a market mover.
