What to Watch: Eye on Weaker Crude; MNI PMI
Mar-31 11:46
US FI markets trading firmer on decent volumes (TYM2>450k), curves steeper: 2s10s +3.002 at 6.185 after inverting briefly Tuesday, 5s10s +1.052 but still inverted at -8.228. Jun 30Y futures near early London highs of 150-03 at 149-31 (+17), 30YY at 2.4545, -.0198.
- Focus on oil: Crude weaker on talk of oil reserves release, US Pres Biden will speak about gas prices, SPR release at 1330ET. Livestream link: https://www.whitehouse.gov/live/
- Meanwhile, "OPEC+ Will Stick To Existing Plan For Oil Output" Reuters
- Flurry of Data at 0830ET
- Initial Jobless Claims (187k, 196k); Continuing Claims (1.350M, 1.340M)
- Personal Income (0.0%, 0.5%)
- Personal Spending (2.1%, 0.5%)
- Real Personal Spending (1.5%, -0.2%)
- PCE Deflator MoM (0.6%, 0.6%); YoY (6.1%, 6.4%)
- PCE Core Deflator MoM (0.5%, 0.4%); YoY (5.2%, 5.5%)
- At 0945ET: MNI Chicago PMI (56.3, 57.0)
- US Tsy auctions $35B 4W, $30B 8W bill auctions at 1130ET
- Fed speak:
- NY Fed Williams opening remarks: future of NY conf, NY Fed at 0900ET
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BOND SUMMARY: EGB/Gilt: Safen Haven Flows Intensify
Mar-01 11:43
European government bonds have rallied sharply this morning with double digit moves in yields. Bilateral talks on the Belarusian border between Russian and Ukrainian officials failed to reach a resolution, with Moscow now stepping up its military bombardment.
- Following a slow start, gilts rallied through the morning with cash yields now down 12-14bp on the day.
- Bund yields are down 13-16bp.
- OAT yields are 10-20bp lower with the 5-year benchmark leading the charge.
- BTPs trade in line with OATs. Cash yields have fallen 10-20bp, with the belly of the curve outperforming.
- German regional CPI data for February show a broad acceleration from the previous month, with the national estimate due at 1300GMT. Italian CPI surprised higher in the same month (6.2% Y/Y vs 5.5% expected).
- Supply this morning came from Spain (Letras, EUR5.249bn) and Belgium (TCs, EUR2.4bn),
RUSSIA: Russia Swaps Signal 65% Chance of Default as War Widens
Mar-01 11:38
- RUSSIA SWAPS SIGNAL RECORD 65% CHANCE OF DEFAULT AS WAR WIDENS
- Contracts insuring $10 million of the country’s bonds for five years were quoted at about $4.6 million upfront and $100,000 annually, signaling around 65% likelihood of default: ICE data
- The upfront cost that protection sellers demanded on Tuesday rose from around $4 million on Monday
- The price of protecting Russia’s debt is no longer being quoted in basis points, as protection sellers have been demanding payment in advance, signaling perceptions that default risk might be imminent.
EGB SYNDICATION: German 30-year tap: Launched
Mar-01 11:37
- Maturity: 15 August 2052
- Size: €4bln Will Not Grow (no retention)
- Spread set previously at 0% Aug-50 Bund + 3.5bps (Guidance was +4bps area)
- Books in excess of E21bln (inc E2.9bln JLM)
- Settlement: 8 March 2022 (T+5)
- ISIN: DE0001102572/ Immediately fungible
- Bookrunners: BNPP, Citi, DB (DM/B&D), GSBE, JPM
- Timing: Books closed. Allocations and pricing to follow
From market source
