FOREX: USD Share Of Global FX Reserves Steady In Q1, Larges Swings In AUD, CHF
Latest IMF COFER data for Q1 2025 showed the US dollar’s share of total global FX reserves unchanged at 53.6%, the lowest level since Q2 2017. The USD’s share of “allocated” reserves (i.e. those reported in sufficient detail) was similarly little changed at 57.7% (vs 57.8% In Q4). A reminder that this data does not capture any US Liberation Day-induced changes in reserves.
- Looking at the other “big four” currencies, the EUR’s share of allocated reserves ticked up to 20.1% (vs 19.8% in Q4, 20.0% in Q3). In its annual report on the Euro, the ECB noted that “further shifts may be underway in the landscape of international currencies. The tariffs imposed by the US Administration have led to highly unusual cross-asset correlations. This could strengthen the global role of the euro and underscores the importance for European policymakers of creating the necessary conditions for this to occur.”
- The JPY saw a more notable fall in its allocated share to 5.1%, from 5.8% in Q4. Meanwhile, GBP’s share ticked up to 5.2% (vs 4.7% in Q4, 5.0% in Q3).
- More interesting developments were seen amongst non-traditional (i.e. not USD, EUR, JPY, GBP) currencies. CHF’s share of allocated reserves shot up to 0.8% from 0.2% in Q4. That’s a quarterly increase worth ~7% GDP after converting to local currency.
- Meanwhile, AUD’s share of allocated reserves dropped to 1.4% from 2.1% prior, the lowest since reporting began in Q4 2012.
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GILTS: Labour Market-Driven Rally Holds, Next BoE Cut Priced For Sep
Gilts remain underpinned after drawing support from softer-than-expected wage data and a larger-than-expected fall in payrolled employees.
- Downticks in e-minis and European equity indices provided further support (but lacked an overt driver), even with the FTSE 100 benefitting from a softer GBP.
- Gilt futures traded as high as 92.66 before fading back to ~92.50, adding more than 70 ticks vs. yesterday’s settlement.
- Initial resistance located at the June 5 high (92.63) has been pierced, with bulls now looking to a Fibonacci resistance point (92.79).
- Yields 5-7bp lower, 10s outperform on the curve.
- 2-Year yields set for the lowest close seen since May 9, while 10s and 30s trade below their respective closes from the same day.
- 2s10s holds above 60bp, with recent moves below that level limited in scope and short-lived.
- 5s30s trade around 120bp after the recent run of closes below the level.
- GBP STIRs now fully discount the next 25bp cut come the end of the September MPC, with 48bp of cuts showing through year-end (vs. 41bp late yesterday). Labour market data drives things there.
- Books on the 1.75% Sep-38 I/L gilt syndication are closed, with demand nearing ~GBP60bln ~15 minutes before books closed (per bookrunners).
- Macro matters are set to dominate for the rest of the day, with domestic inputs (comments from BoE’s Saporta & the government spending review) set to come back to the fore tomorrow.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Jun-25 | 4.208 | -0.3 |
Aug-25 | 4.019 | -19.3 |
Sep-25 | 3.957 | -25.5 |
Nov-25 | 3.800 | -41.2 |
Dec-25 | 3.730 | -48.2 |
Feb-26 | 3.629 | -58.3 |
Mar-26 | 3.606 | -60.6 |
BELGIUM T-BILL AUCTION RESULTS: Short / Long TCs
| Maturity | Sep 11, 2025 | Jun 11, 2026 |
| Amount | E880mln | E1.601bln |
| Target | E2.2-2.6bln | Shared |
| Previous | E897mln | E801mln |
| Avg yield | 1.911% | 1.926% |
| Previous | 1.930% | 1.895% |
| Bid-to-cover | 2.77x | 2.21x |
| Previous | 2.37x | 3.06x |
| Previous date | Jun 03, 2025 | Jun 03, 2025 |
