EGB SYNDICATION: Spain 10-year: Priced
May-28 14:28
- Reoffer: 99.707 to yield 3.235%
- Spread set at 3.15% Apr-35 Obli (mid) +7bps (guidance was +9bps area)
- HR 103.5% spot ref 99.870 / 3.165%
- Size: E13bln (MNI expected E10-13bln)
- Books in excess of E120bln (incl. E6bln JLM interest)
- (For reference the book in January was a record E139bln)
- Maturity: 31-Oct-2035
- Settlement: 04-Jun-2025 (T+5)
- Coupon: 3.20%. Short first to 31-Oct-2025
- ISIN: ES0000012P33
- Bookrunners: BARC, BBVA (B&D/DM), JPM, MS, SANTANDER, SG
- Timing: TOE 15:11BST / FTT Immediately
From market source and MNI colour
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US TSY OPTIONS: Jun'25 10Y Ratio Put Spread
Apr-28 14:27
- +12,500 TYM5 110.5/111.5 2x1 put spds, 1 net vs 111-17.5/0.10%
EURGBP: Cross Through Major Support Zone as UK-US Trade Deal Seen Simpler
Apr-28 14:25
GBP strength Monday has prompted EUR/GBP to trade through a major support area we flagged last week at 0.8520-31 - marking both the early April pullback low as well as the 50% retracement of the tariff-inspired upleg off 0.8323.
- GBP outperformance over the EUR over the past two weeks will partly be a mean reversion effect, but could be as markets see greater near-term potential for a US-UK trade settlement over a US-EU agreement inside the 90-day tariff pause window (after which Trump has said the stricter levies - 20% for the EU - will return).
- On the surface, a UK/US trade settlement seems simpler - despite Reeves' claim the UK are "not going to rush into a deal". Food standards are the main sticking point, but with the UK publicly willing to lower levies on UK-bound cars, a compromise seems politically straightforward relative to the higher number of moving parts for an EU agreement.
- Less noted, however, is the UK's decision not to follow the EU in raising tariffs against Chinese electric car imports, which could become a bargaining chip as Washington look to freeze Chinese industry from global markets - and restrict the UK's ability to enjoy easy relations with all parties.
- These trade prospects could provide a quick win for GBP, and markets may be seeing some of this strength play out against the rest of G10 - however the implications for BoE policy are likely minimal, and should keep BoE on track for 3x25bps cuts this year: Bailey specified last week that even preferential treatment on tariffs wouldn't spare the UK economy - while Greene stated it was the April pay settlement round that will be key for policy.
EUR: EURJPYis reversing Friday's gains
Apr-28 14:22
- A few low prints for the EUR, against the JPY, GBP and the SEK.
- The EURJPY tested its highest level since the beginning of April on Friday, this was a 163 pips gain, but the cross is now looking at fully reversing that move.
- Friday's low is at 162.13, it is now exchanging hands at 162.57.
