Trial now
USDCAD TECHS

Heading North

GLOBAL POLITICAL RISK

Modi, AMLO Top Major Economy Leader Poll, Macron Last

AUDUSD TECHS

Under Pressure

EURJPY TECHS

Trend Condition Remains Bearish

And BMO's Aaron Kohli noted that.......>

US TSYS/TIPS
US TSYS/TIPS: And BMO's Aaron Kohli noted that crude oil has "been more or less
stable over $50 which is a positive sign and likely part of the reason buyers
are coming back to TIPS." He adds that the "smaller reopening size" at $12B 10Y
TIPS reopening today "means there's a marginally smaller risk of a tail. Stats
bear that out with reopenings averaging 0.3bp stops through 1pm levels and
refundings just shy of a 1 bp tail."
- But Kohli noted some disadvantages for the TIPS 10Y reopening. "Breakevens
have risen significantly since July but are off the local peaks," he said. "We
don't see compelling value in 10-year breakevens at these levels and they look
rich versus 30-year breaks. The 5s/10s/30s BE fly is a few bps off the richest
levels of the last year, but doesn't look cheap by any measure."
- He also noted that CPI ex-shelter "has been on a downtrend for several months
now, and the fact that the Fed looked through it entirely is a discouraging fact
for TIPS investors and doesn't offer an incentive to price a higher inflation
risk premium."