EGBS: Spreads To Bunds Widen Despite Recovery From Lows In Bonds
Jun-19 12:37
While core global FI markets have recovered from lows, aided by smooth digestion of this morning’s EGB supply and spillover from this morning’s central bank decisions, the more meaningful moves come in EGB spreads.
- OAT/Bunds has traded out to 74bp (+2.5bp), representing the widest level since April, while BTP/Bund trades out to 98bp (+3bp), the widest since June 3.
- Broader risk aversion and inflationary risks surrounding tensions in the Middle East have factored into the recent widening, while there has been a lack of fresh tightening catalysts evident.
- Meanwhile, French political risks remain, with PM Bayrou potentially set to face a censure motion from the Socialist Party linked to pension reforms, per local reports.
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CANADA APR CPI +1.7% YOY ON CARBON TAX REMOVAL, PRIOR +2.3%
May-20 12:30
- CANADA APR CPI +1.7% YOY ON CARBON TAX REMOVAL, PRIOR +2.3%
- BOC CORE CPI MEASURES QUICKEN TO FASTEST IN A YEAR
- CORE TRIM CPI +3.1% YOY FROM +2.9%; MEDIAN +3.2% FROM +2.8%
- CANADA CPI EX-ENERGY +2.9% FROM +2.5%, THE FASTEST IN A YEAR
- CANADIAN APR CORE PRICES BOOSTED BY TRAVEL TOURS AND FOOD
CANADA DATA: BOC Preferred Core Measures Rose The Fastest In A Year In April
May-20 12:30
- StatsCan report Tues showed the Bank of Canada's preferred median and trim indicators quickened above the BoC's target band at +3.2% and +3.1% respectively in April.
- Headline inflation +1.7% in April from +2.3% in March. The deceleration was mainly due to the consumer carbon tax removal.
- CPI excluding energy fastest in a year, +2.9% in April from +2.5% in March. Gasoline prices -18% in April.
- Travel tours +6.7% and food prices +3.8% moderated decline in headline April CPI. Grocery prices elevated for third straight month.
- StatsCan said it enhanced its methodology for April's passenger vehicle and homeowner's home insurance price indexes. Also said that next CPI on June 24 will use updated basket weights.
- BOC has said it will support economic growth while ensuring inflation remains well controlled. With its preferred core CPI indicators above its target band, a cut at its next June 4 rate decision is less likely.
