FOREX: US Dollar Maintaining Bullish Tilt
Mar-05 10:42
- Some renewed pressure on risk sentiment and upside for crude futures Thursday is assisting the US dollar to maintain its bullish tone this week. A moderate bump higher for the DXY today keeps the week’s advance at 1.35%, with the index hovering just below the 99.00 mark. A strike on a Kuwait tanker may still be weighing on risk overall, despite an offsetting boost surrounding an unclear headline on Iran abandoning its nuclear program.
- AUDUSD has continued to exhibit notable volatility on Thursday, already trading in a 1.11% range on the session, and currently down 0.44% on the session. Despite this, bullish conditions remain intact after support at the 50-day EMA held Tuesday, intersecting at 0.6931. Short-term parameters for the pair are well defined, with a cluster of significant resistance building between 0.7125-50. Potential positive news around the Strait of Hormuz may be required for a convincing move above that cluster as AUD's risk sensitivity would add to Australia's significant exposure to flows through the straight in such a case.
- EURCHF continues to trade with a bearish tilt on Thursday, slipping to a session low of 0.9050 in recent trade, and eroding the week’s prior rally that was assisted by SNB commentary on a higher readiness to intervene. The phrasing of ‘would jeopardize’ perhaps places a greater emphasis on the importance of this week's cycle lows at 0.9025, with moves below this level likely to be met with additional central bank rhetoric, or active intervention.
- Both EUR and JPY are trading in line with the adjustments for the dollar, with EURUSD remaining steady just above the 1.16 handle. GBP is a small underperformer, sliding back towards the 1.33 mark.
- The US data calendar is heavy today, with Challenger Job Cuts, import / export prices, nonfarm productivity and weekly claims scheduled ahead of tomorrow's payrolls. From the ECB, we will see the minutes from the February meeting ahead of Lagarde comments. Fed's Bowman and Goolsbee are also scheduled.
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BELGIUM T-BILL AUCTION RESULTS: TC Results
Feb-03 10:39
| Maturity | May 14, 2026 | Aug 13, 2026 | Jan 14, 2027 |
| Amount | E1.212bln | E988mln | E1.006bln |
| Target | E2.8-3.2bln | Shared | Shared |
| Previous | E1.085bln | E965mln | E1.85bln |
| Avg yield | 1.966% | 1.980% | 2.026% |
| Previous | 1.959% | 2.005% | 2.066% |
| Bid-to-cover | 1.77x | 1.98x | 2.58x |
| Previous | 1.84x | 2.04x | 1.81x |
| Previous date | Jan 13, 2026 | Jan 06, 2026 | Jan 13, 2026 |
BOE: ILTR operation in focus; results due imminently
Feb-03 10:37
We've seen no large movements in RONIA following last week's gilt redemption, but even so we will be watching today's ILTR result carefully to see whether there is any notable increase in takeup.
- The past couple of weeks have seen repo usage rise to record levels: after staying around GBP158-160bln between late November and mid-January usage has picked up to GBP18.1bln in last week’s operations.
- Reserve balances fell to GBP646.0bln last week (from GBP662.0bln) suggesting that the impact may have already been seen.
- Results will be available for today's ILTR operation at 10:40GMT.
EGBS: Steepening In German 2s10s Has Scope To Extend
Feb-03 10:37
The German 2s10s curve has bear steepened around 0.7bps to ~76bps today. There may be scope for further steepening over the coming months, with the ECB outlook facing lingering (albeit small) dovish risks and more structural long-end pressures remaining relevant. The initial topside target in the spread is the Jan 21 high at ~81bps.
- Schatz yields are up 0.5bps to 2.12%. French flash inflation was softer-than-expected this morning, while the ECB’s Q4 BLS indicated a relatively muted credit-led growth impulse.
- 10-year yields are up 1.5bps to 2.88%, having traded in a fairly contained ~2.80-2.90% range since mid-December.
- Bund futures are -17 ticks at 127.77. Initial support is the Jan 23 low at 127.51. The trend outlook remains bearish.
- Today’s supply calendar includes syndications from Italy (15y) and the ESM (10y). Germany sold green Bunds at 1030GMT.
- 10-year EGB spreads to Bunds are biased tighter, with European equity futures up around 0.5%. OATs lightly outperform, with the 10-year OAT/Bund spread just below 57bps. The French core state budget deficit improved notably in December as higher receipts drove a large monthly surplus. These core state figures on a cash basis recorded a budget deficit of ~4.2% GDP, far smaller than 4.7% GDP in the original LFI and also the 4.5% GDP in updated estimates.
- The remainder of today’s macro calendar is light, with focus on US Government attempts to end the ongoing shutdown.
Figure 1: German 2s10s Since 2025 (Source: Bloomberg Finance L.P)
