UK DATA: Young People NEET Still Below Q4-24; Getting More Political Attention
Feb-26 11:41
The level and proportion of young people not in employment, education or training (NEET), increased ...
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PIPELINE: Corporate Bond Roundup: $2.5B Canada Pension Plan 5Y SOFR on Tap
Jan-27 11:36
- Date $MM Issuer (Priced *, Launch #)
- 01/27 $2.5B CPPIB (Canada Pension Plan) 5Y SOFR+40
- 01/27 $1B Caisse des Dépôts et Consignations (CDC) 3Y +44
- 01/27 $Benchmark Royal Bank of Canada 60NC7 6.625%a
- 01/27 $Benchmark Macquarie Bank 2Y +60a, 2Y SOFR
- 01/27 $Benchmark Bahrain +8Y Sukuk 6.625%a, 12Y 7.5%a
- $15.75B Priced Monday
- 01/26 $4B *Aramco $500M 3Y +60, $1.5B 5Y +80, $1.25B 10Y +95, $750M 30Y +130
- 01/26 $4B *Ecuador $2.2B 8Y 8.75, $1.8B 13Y 9.25%
- 01/26 $2.5B *Goldman Sachs 15NC10 +118
- 01/26 $2B *Fifth Third Bancorp $1B 6NC5 +75, $1B 11NC10 +93
- 01/26 $1B *New York Life $700M 3Y +40, $300M 3Y SOFR+57
- 01/26 $1B *United Airlines 5NC 5.375%
- 01/26 $750M *Tyco Electronics Group $200M 5Y +48, $550M 10Y +70
- 01/26 $500M *Isbank 11NC6 7.575%
STIR: US Rates Little Changed, Second Tier Labor Releases See Some Focus Today
Jan-27 11:31
- Today’s data focus is likely on weekly ADP as it starts to get closer to the January payrolls reference period before the Conference Board consumer survey and its labor differential in particular.
- Weekly ADP showed some recovery in the second half of Nov through Dec after a weak official monthly Nov print, whilst the latter has been one of the softer labor indicators in recent months and points to a further uptrend in the unemployment rate.
- Fed Funds implied rates are little changed overnight and continue to only just fully price a next FOMC cut in July, with June currently ruled out despite being under a new Fed chair.
- Cumulative cuts from 3.64% effective: 1bp Jan, 4bp Mar, 7bp Apr, 19.5bp Jun, 26.5bp Jul, 36bp Sep, 41.5bp Oct and 46.5bp Dec.
- SOFR futures are little changed on the day, with a terminal implied yield of 3.255% (Z6) still close to last week’s 3.285% highest close since June.
- BlackRock’s Rieder still holds a commanding lead in the running for next Fed chair role after surging last week, with betting sites putting him at ~50% followed by former Fed Gov. Warsh a little below 30%. Rieder said "the funds rate should be at three" after the Fed's December rate cut.
EUR: EURUSD Approaching 1.19 Handle Once More, Impulsive Bull Cycle Intact
Jan-27 11:31
- A EURUSD dip down to 1.1850 was well supported, with the pair subsequently returning to levels just below 1.19. As a reminder, yesterday’s peak came within 12 pips of last year’s high at 1.1919, a key medium-term hurdle for the next bullish leg.
- Clearance of this level would open 1.1958, a Fibonacci projection, before the key psychological target of 1.20, which provided a key target for several sell-side forecasters last year. It is worth noting that recent price action has placed the EURUSD bullish trend in overbought territory, and a pullback would allow this condition to unwind. Support to watch moves up to 1.1716, the 20-day EMA.
- Key dollar headwinds have weighed significantly on the broad dollar index, and we have highlighted the importance of this week’s/month’s close in reference to the key monthly trendline support, intersecting at 97.39. A close below would be a very bearish signal for the greenback (chart attached) and would continue to bolster the underlying support for EURUSD .
- SocGen believe there are still two main strands to a bearish dollar view: Firstly, that the administration wants a weaker dollar and will either persuade the FOMC to ease monetary policy enough to help him get one, or will create sufficient policy uncertainty in general, that President Trump weakens the dollar regardless.
- BBVA say that from here on, the room for much more EURUSD upside appears limited given stretched technicals, with more room for a potential correction if macro fundamentals return to centre stage. They maintain their buy-on-dips strategy, targeting a potential return to 1.16 as an attractive level to re-enter EURUSD longs.
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