FOREX: USD Index Consolidates At Lower Levels
Jun-27 09:39
* Currency markets are more sanguine early Friday, but the lack of any reversal off lows for the U...
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GERMAN AUCTION RESULTS: 1.00% May-38 Bund / 4.75% Jul-40 Bund
May-28 09:36
| 1.00% May-38 Bund | 4.75% Jul-40 Bund | |
| ISIN | DE0001102598 | DE0001135366 |
| Total sold | E1.5bln | E500mln |
| Allotted | E1.398bln | E490mln |
| Previous | E1.253bln | E801mln |
| Avg yield | 2.80% | 2.85% |
| Previous | 2.60% | 2.66% |
| Bid-to-offer | 2.20x | 5.68x |
| Previous | 2.36x | 1.26x |
| Bid-to-cover | 2.36x | 5.80x |
| Previous | 2.83x | 1.58x |
| Avg Price | 80.69 | 123.00 |
| Low Price | 80.68 | 122.94 |
| Pre-auction mid | 80.646 | 122.902 |
| Prev avg price | 82.29 | 128.44 |
| Prev low price | 82.27 | 128.37 |
| Prev mid-price | 82.235 | 128.352 |
| Previous date | 26-Feb-25 | 24-May-23 |
GILTS: Curve Bear Flattens, Supply Digested Smoothly
May-28 09:34
Gilts hold the bulk of their losses.
- Some concession was seen ahead of today’s green gilt supply and this morning’s syndication announcement seemed to weigh (a new long 13-year linker will be issued via syndication in the W/C 9 June. The timing is as we expected, but this maturity choice was not fully expected).
- Green supply ultimately saw solid demand, which allowed the space to stabilise.
- GU5 bases at 90.99.
- Fresh downward momentum would expose the 23 May low (90.46).
- Yields 2.5-4.0bp higher, curve bear flattens.
- 10-Year spread to Bunds ~2bp wider at ~215bp, on track for the highest close since mid-April. A cluster of April closing highs at 218.3/218.8bp presents the next upside areas of interest.
- BoE-dated OIS prices ~35bp of cuts through year-end vs. 36bp ahead of the gilt open.
- A text covering comments from BoE chief economist Pill will be released today (on the topic of “monetary policy: taking a walk on the supply side”) although don’t expect it to be market moving as the address was given on Thursday of last week.
- A reminder that Pill has already reaffirmed his position at the hawkish end of the BoE spectrum after lodging a dissenting vote earlier this month (to leave rates on hold).
- That should leave focus on macro cues.
EUROPEAN INFLATION: Services Help Belgian Core Inflation Ease In May
May-28 09:30
Belgian May flash HICP inflation was 2.8% Y/Y, down from 3.1% in April for the lowest reading since Januaary 2024. Annual CPI inflation eased to 2.01% (vs 2.55% prior), while CPI ex-energy and unprocessed foods decelerated to 2.59% Y/Y (vs 2.82% prior).
Looking at the major sub-components on a CPI basis:
- Services inflation eased to 3.65% Y/Y (vs 3.96% prior) despite an uptick in rent inflation to 3.60% (vs 3.51% prior). Airfares saw a -13.8% Y/Y reading, meaning the transport component pulled down headline inflation by 0.49pp.
- Food inflation was 2.04% Y/Y (vs 2.48% prior).
- Energy inflation was -1.10% Y/Y (vs +0.95% in April and 5.48% in March). On a monthly basis, there were declines in natural gas (-6.2%) and electricity (-4.0%), which pulled down respective annual rates. Fuel inflation was -9.9% Y/Y.
Figure 1: Belgium CPI Trends
