CROSS ASSET: USD makes broader lows
Dec-22 10:35
- Broader new lows for the Dollar against the EUR, SEK, NOK, PLN, CHF, CZK, GBP.
- EURUSD now test the immediate resistance noted at 1.1017, and further upside traction, would open to 1.1065 High Aug 10.
- Gold firms towards $2060 on the Dollar move, and test its highest level since that strange $115 range on the 4th December.
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OPTIONS: Expiries for Nov22 NY cut 1000ET (Source DTCC)
Nov-22 10:34
- EUR/USD: $1.0730-50(E1.7bln), $1.0840-60(E1.4bln), $1.0905-25(E2.7bln), $1.0930(E591mln), $1.0940-45(E1.9bln), $1.0960-61(E632mln)
- EUR/GBP: Gbp0.8705-15(E867mln), Gbp0.8735-50(E519mln)
- USD/JPY: Y147.75($1.2bln), Y149.10($671mln)
- AUD/USD: $0.6320(A$1.1bln) $0.6435-40(A$1.7bln)
- USD/CNY: Cny7.2400-20($1.2bln), Cny7.2500-10($1.1bln)
GILTS: Holding Cheaper, Autumn Statement Nears
Nov-22 10:32
Gilt futures continue to hold shy of settlement levels, with wider core global FI swings (covered elsewhere) and pre-Autumn Statement adjustments moves at the fore thus far.
- That leaves futures -30 or so, just above 97.00. Bulls remain in short-term technical control, with well-defined technical parameters remaining untouched for now.
- Cash gilt yields are 0.5-3.5bp firmer on the day, with a bear flattening impulse seen.
- SONIA futures are flat to 8.5bp lower through the blues, with the late reds and early greens coming under the most pressure. The bulk of that move came late on Tuesday as core global FI markets came under pressure into the gilt close.
- Liquid BoE-dated OIS contracts run little changed to ~4bp firmer on the day.
- We have covered the latest rounds of press leaks/speculation re: the impending Autumn statement elsewhere (largely centred on promoting business investment and a national insurance cut for individuals, with expectations for an income tax cut in a pre-election Spring Budget). Our full preview of the event, including gilt remit expectations, can be found here.
EGBS: Mixed Price Action Though Bunds Trade Within Yesterday's Range
Nov-22 10:24
EGBs see mixed price action early Wednesday, though Bund futures trade within yesterday's range.
- Global core FI was pressured by a weak BoJ Rinban operation and Israeli cabinet approval of an Israel/Hamas hostage deal overnight, before Bund/OAT futures found support as European desks filtered in (potentially on the back of German fiscal headlines r.e. reinstating the 2024 debt brake late Tuesday and expectations for lower Gilt issuance in the UK Autumn Statement later today).
- An additional bout of weakness came following hawkish comments from RBA Governor Bullock and financial stability concerns from today's ECB review, before price action reversed.
- The short-term tone in Bund futures remains firm, though a break of the Nov 7/13 low of 129.35 would highlight a possible reversal. Today's 15Y supply represents 13.7k Bund equivalent, so is not expected to weigh significantly. Core/semi-core yields are -1bps lower to +2bps higher at typing.
- Periphery spreads to Bunds are marginally tighter this morning. BTPs came under some pressure following headlines from the ECB's Financial Stability Review and ahead of today's exchange auction, but are off intraday lows.
- Today's local docket is light, with ECB's Centeno (presenting Portugal's Financial Stability Report) and Nagel (panel at Osservatorio Permanente Giovani-Editori) not expected to be market movers. Flash Eurozone consumer confidence at 1500GMT provides the data highlight.
