BUNDS: Testing the Initial resistance
Apr-30 07:42
- Bund is testing that small initial level at 131.63, but not too clear on this latest bid, the only headline that China wasn't in talks with the US may be providing some safer haven flow, but looking at Volumes these are still subdued, not seen any notable clip size into the gains.
- The German supply is also not expected to really weigh, but worth a note that, Month End extension in Europe for MS are decent, could expect some bid later in the Day around the unofficial EU close.
- Nonetheless, further upside traction in Bund would eye the 132.03 level.
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EGBS: Spreads To Bunds A Little Wider On Risk-Off Price Action
Mar-31 07:40
Spreads to Bunds remain fairly insulated from widening during today’s risk-off price action, with the major 10-Year differentials last little changed to 1bp wider on the day.
- Pricing of deeper ECB easing is offsetting some of the GDP growth-related widening impetus.
- Meanwhile, the medium-term increase in German issuance continues to factor into a lot of the spread-related commentary we have read, although some now hold a bias for modest spread widening.
- OAT/Bunds ~71bp after closing above 70bp on Friday.
- A reminder that RN leader, Marine Le Pen, will appear in front of a judge as part of an RN embezzlement trial. A decision is expected between 10:00-12:00 CET (09:00-11:00 BST). Le Pen could be suspended from elections for 5 years if found guilty.
- Whatever the outcome, the French political situation is set to continue to present a source of uncertainty, with Le Pen polling well and fiscal risk remaining evident.
- BTP/Bunds is set for its highest closing level since mid-March but remains below 115bp.
GILTS: Rallying On Wider Risk-Off Flow, Bullish Technical Threat Increases
Mar-31 07:28
Gilts through last week’s highs on the wider risk-off price action stemming from U.S. tariff worry ahead of “Liberation Day”.
- Futures peak at 92.10 before fading back below 92.00, still up the best part of 50 ticks on the day.
- Note that the short-term technical trend in the contract remains bearish, but the bullish threat has increased.
- Initial Fibonacci resistance (92.17) protects trendline resistance drawn off the March 4 high (91.55).
- Yields 2.5-4.0bp lower, 10s outperform on the curve.
- GBP STIRs still around levels we flagged ahead of the gilt open, as most of the early dovish adjustment holds.
- The DMO will hold its consultations regarding FQ1 (April to June) issuance at 15:30BST (investors) and 17:00BST (GEMMs) today.
- We set out our expectations for gilt issuance across FY25/26 in our UK Issuance Deep Dive publication.
- Elsewhere, only lower tier UK economic data is due on Monday, which will leave macro cues at the fore for much of the session.
EFSF ISSUANCE: New 5-year: Guidance
Mar-31 07:25
- EUR Benchmark of the new 5y May-30 MS+32 Area
- Coupon: Annual, act/act, long first
- ISIN: EU000A2SCAT6
- Maturity: May 7, 2030
- Format: Reg S, bearer, 0% rw
- Issuer: European Financial Stability Facility (EFSF)
- Bookrunners: Citi, CA-CIB (B&D), SocGen
- Settlement: April 7, 2025
- Timing: May price today.
Details via Bloomberg
