EU AUTOMOTIVE: Volkswagen: Porsche Succession                  

FFF6/G6 paper paid -12.0 on ~3.9K.

• The DSTA has reiterated its issuance target of E40bln on capital markets. The total borrowing requirement has been lowered by E1.8bln due to a lower expected cash deficit.
• The DSTA will hold three DSL auction in Q4: E2.0-2.5bln of the on-the-run 10-year 2.50% Jul-35 DSL (ISIN: NL0015002F72) on 11 November. There will also be two auctions of existing DSLs held on 14 October and 25 November.
• The six usual DTC auction dates will all be utilised and see both short-dated and longer-dated DTCs on offer at each.
• The DSTA will release its 2026 outlook on Friday 12 December.

Key support in the form of the August 14 low (146.21) in USD/JPY held to the pip in Tokyo trade, with broader stabilisation in the USD helping the pair back to 146.65 through early London trade.

• This evening’s Fed decision will of course be key for at least shorter-term direction.
• Westpac look to sell USD/JPY on any break below 146.20 with a target of 144.00 and a stop set at 147.05. They believe that “risks around the FOMC are tilted asymmetrically, with risk appetite channels likely a key driver in the event of an underwhelming/net hawkish outcome, capping USD/JPY upside. BoJ Governor Ueda likely keeps a cautious door open to the possibility of tightening monetary policy in Oct. The entry of centrist Koizumi in the LDP race lowers the tail risks of a disruptive loosening of Japanese fiscal policy”.