EM CEEMEA CREDIT: YAPI VE KREDI $500M WNG 10.5NC5.5 T2 - IPT

A little more on EUR money markets in the wake of the previous note. Commerzbank flag that “following the month-end dip, repo levels have normalised. In the ECB's SMA analysts expect €STR fixings to stay at 8bp below the ECB DFR until Q127”. They believe that “this seems too relaxed given the recent experience in the U.S. and UK and considering that the spread tightened to 7bp last Thursday”.

• Reeves again says that she will focus on continuing to see inflation falling and helping more rate cuts to be delivered.
• That doesn't sound consistent with a VAT hike being under consideration (we still think income tax increase is more likely if one of the big taxes is raised).

• Core European Bonds traded well through European open, but Bunds have faded off highs despite the broad risk-off theme. For Bunds, a further risk-off fuelled rally here would open the first upside area of interest into 129.52, the reversal level for the less-dovish-than-expected FOMC on Wednesday last week. Further strength would open 129.73, followed by 130.07.
• US Treasuries are leading with T-notes looking to test yesterday's high at 112.29+, although the initial resistance moves down to 113.00. There are no tier 1 data releases out of Europe nor the US today. The focus in early trade will be on supply and the current speech trickling through from UK Chancellor Reeves.
• SUPPLY: UK £5bn 2029 (equates to 18.4k Gilt) should have a limited impact, German €5bn 2yr (equates to 52.8k Schatz) will weigh into the bidding deadline.
  SPEAKERS: ECB's Lagarde (x2), Patsalides, Escriva, Rehn, Nagel, UK Chancellor Reeves, BoE's Breeden and Fed's Bowman.