EUROZONE T-BILL ISSUANCE: W/C November 9

• After a recovery phase on Tuesday, risk appetite dipped again on Wednesday, led by EUR weakening and the dollar returning higher. Markets continue to be led by fiscal and sentiment matters across European government bond markets. The French-German 10y yield spread re-widened by over 10bps on the day, undermining peripheral EGBs - namely Italy - and providing a solid drag on equities. The net result for currencies was a weaker EURUSD. The pair returned toward the weekly low, but managed to stabilise before any test on the Monday and cycle low at 1.1161.
• In constrast, EURGBP traded poorly ahead of the London close, breaking through the bear trigger at the mid-July YTD low of 0.8455. This price action failed to steady GBPUSD, however, which broke lower as markets watch the formation of a bearish flag pattern on the daily chart. A support zone undercuts at 1.3181 - 90 (the weekly / October lows), however these are largely symbolic and support is not seen as significant until the June YTD low of 1.3140. GBP vols are worth monitoring at these levels as implied spiked late last week as the 1m contract captured the UK Budget at the end of the month. Markets seem wary of another tax-rising budget - with a combination of banking taxes and possible capital gains tax re-weighting seen as possible funding sources.
• JPY traded well, however USDJPY made decent progress thanks to the rallying USD. USDJPY rallied to touch the 200-dma at 158.52 in Asia-Pac hours before swiftly retreating. Price continues to trade above the 20-day EMA, at 157.41. A clear bearish break of the average would undermine the recent bull leg and reinforce a possible reversal signal on Sep 25 - a bearish engulfing candle. For now sights are on key resistance is 159.04, the Sep 24 high. Clearance of this hurdle would be bullish.
• Focus Thursday shifts to weekly US jobless claims data, which are expected to keep pace with last week's 198k. The data may be less of a priority after last week's payrolls print, particularly as the Fedspeak calendar picks up. Thursday sees Kashkari, Musalem and Waller all set to speak, as well as ECB's Moulin, Sleijpen, Zigman, Lane, Stournarasand more. Lastly, the BoJ are also set to release their branch managers meeting report, covering the regional economy.

Reuters reports that, according to its sources, Costa Rica's former Second Vice-President Rebecca Grynspan is leading in the race to serve as the next UN Secretary-General. The incumbent, former Portuguese PM Antonio Guterres, has served his customary two five-year terms and is due to leave office at the end of 2026. 

• The headline comes a week after Reuters reported that an informal poll by the UN Security Council showed Grynspan as the frontrunner. Reuters: "The fourth secret poll by the 15-member Security Council followed the gathering of world leaders at the General Assembly in New York last week. The first and third polls, held in July and September, also showed Grynspan narrowly ahead while ⁠an August poll placed Guyana's UN ambassador Carolyn Rodrigues-Birkett in the top spot."
• In the latest secret straw poll of the wider Security Council, Reuters reports, "Grynspan received 10 encourage votes, three discourage and two no opinion. Rodrigues-Birkett received ⁠eight encourage ​votes, six discourage and one no opinion, sources ​close to the process said. Argentina's Rafael Grossi, the high-profile director general of the UN nuclear watchdog, also ​received eight encourage and seven discourage votes."
• Winning candidates require at least nine 'encourage' votes and no vetoes from any permanent UNSC members (China, France, Russia, UK, US).
• The Guardian reported in September that late entrants may be drafted given lack of consensus surrounding any of the seven public candidates at present, and the significant political divisions between the permament members that could scupper candidates viewed as too transtlantic- or China-centric. 

• US TSY 17W BILL AUCTION: HIGH 4.105%(ALLOT 43.02%)
• US TSY 17W BILL AUCTION: DEALERS TAKE 30.19% OF COMPETITIVES
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