EU FINANCIALS: UniCredit/Commerzbank Negotiations
Sep-26 06:53
UniCredit is to offer increased German board representation in an effort to progress its Commerzbank takeover negotiations - the FT reports.
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BONDS: US Treasuries and Gilt Roll Pace (updated)
Aug-27 06:52
December is now front Month, Desks that will look at Sept will be purely for liquidity in the spread as they complete rolling their Sept Positions into Dec.
ROLL PACE:
- WNA: 82%.
- USA: 83%.
- UXA: 82%.
- TYA: 80%.
- FVA: 80%.
- TUA: 88%.
- Gilt: 91% (As of Yesterday).
STIR: Less Than 10bp Of BoE Cuts Priced Through Dec
Aug-27 06:41
A pretty flat open for GBP STIRs, which consolidate recent hawkish moves to fresh multi-month extremes in the light of domestic data developments and the BoE’s hawkish rate cut earlier this month.
- SONIA futures essentially flat, while BoE-dated OIS prices ~9bp of easing through year-end, with the next cut not fully discounted until the end of the April MPC decision.
- A fresh move lower in SFIZ6 would target the June low (96.330).
- SFIZ5/Z6 has rebounded from fresh cycle lows of -32.0, to last trade at -24.0.
- A reminder that MPC member Mann spoke on Tuesday afternoon. She noted that "persistent inflation persistence is my central case." She argued against near-term rate cuts due to inflation persistence and provided further colour on her "activist stance" towards policy.
- Only lower tier CBI distributive trade data is scheduled on the UK macro calendar today.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Sep-25 | 3.976 | +0.9 |
Nov-25 | 3.922 | -4.5 |
Dec-25 | 3.877 | -9.0 |
Feb-26 | 3.784 | -18.3 |
Mar-26 | 3.750 | -21.6 |
Apr-26 | 3.689 | -27.8 |
USD: A positive session for the Dollar
Aug-27 06:38
- The Dollar was in the green throughout the Overnight session, some Overnight desk suggested possible Month End flows, but from what we have seen, the signals at some of the Banks are so Weak that their models have not show any real convictions for the Dollar either way.
- If we look at Bond Extensions, these are OK for the US, just above the August average, this could provide a late small bid into Treasuries Friday, keeping Yield lower, and potentially also the USD.
- The Kiwi has taken over the JPY as the worst early small performer, but NZDUSD still trades well within Yesterday's range, and would need to see a test all the way down to 0.5812, to reverse Powell's tilted Dovish speech.
- USDJPY is founding some resistance at the 148.00 figure, printed a 147.97 high earlier.
- A push up to 148.56, would also reverse Fed Powell's sell off.
