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US TSYS SUMMARY: US Treasuries open NY higher, with yield curves mainly
flatter but 5/30Y a bit steeper. US stock index futures were mixed, mainly
weaker; European stocks indexes are narrowly mixed. Traders await Pres. Trump
choice on Fed Chair this week. Meanwhile NY Times said Paul Manafort and Rick
Gates were told to surrender to Feds in connection with alleged activity tied to
influence peddling probe.
- TOKYO: Tsys improved, flatter with misc acct sales in short end and 2Ys, while
better buying occurred in intermediates to long end. Buying again in MBS
(follows overnight MBS buying too on Oct. 26th.
- LONDON: Tsys continued to hold a bid, extended upside range amid German Bund
rally. Better buying in intermediates; two-way flows in 10Ys with real$ buying.
Options-tied buying/squaring. NYMEX crude oil traded up 0.15% at $53.98.
- US SWAPS: Steady/mixed; light 3Y receiver at 1.9375%.
- OVERNIGHT REPO: Tsys 5Y note remains tight at negative rate.
- EURODLR FUTURS: Short end steady, long end mildly higher.
- US HIGH-GRADE CORPORATE BONDS: No Mon. issuance.
GILT SUMMARY: UK Gilts are trading higher with the curve shifting lower by
around 1.5bps, however volume is very light though as markets await key Bank of
England MPC monetary policy decision on Thursday.
- 2-yr Gilt yield is -1.3bp at 0.453%, 5-yr -1.6bp at 0.784%, 10-yr -1.6bp at
1.34% and 30y -1.3bp at 1.914% according to Tradeweb.
- Gilts opened little changed but then squeezed higher in light volume, more
then likely supported by weekend press reports that Jerome Powell is likely to
be chosen by Trump as the next Fed Chair. While UK Institute for Fiscal Studies
says that the Chancellor is between "a rock and a hard place" as he prepares his
Budget in 3-weeks time. The IFS said that Hammond may have to abandon his target
for getting rid of the deficit as he will need to cut productivity growth and
the economy will grow less quickly due to uncertainty around Brexit.
- In-line BoE mortgage approvals and better than expected net consumer credit
then weighed on Gilts, however they remained in upper range.
- Swap spreads and breakevens are little changed so far Monday.
EGB SUMMARY: German Bunds have been trading modestly higher this morning on
fairly light volumes in wake of slightly softer inflation data. Majority of
German regional flash CPI came in below MNI pan German median forecast of 1.7%
Y/Y. The 10Y Bund yield is currently trading almost unchanged at 0.382%.
- Sunday, thousands of pro-unity supporters marched through the streets of
Barcelona in support of a unified Spain. According to a Sigma Dos poll for El
Mundo showed that 43.4% would vote for unionist parties while only 42.5% would
vote for pro-independence parties. The Bund-Bonos spread has tightened 6.4bp
point on the day and is currently trading at 113.7bp. Other peripheral markets
have also followed the Spanish market with spreads tightening by 6.1bp between
the Bund-BTP and by 9.2bp between the Bund and 10Y Portuguese Bond.
- In terms of European economic data still to come later today there is the
German CPI Y/Y at 1300BST.
- Final Eurozone consumer confidence remained at -1, however, economic,
business, industrial and services confidence data all ticked higher.
- Italy sold max E8.5bln in 5Y and 10Y BTP and new 7Y CCTeu.
--MNI New York Bureau; tel: +1 212-669-6432; email: email@example.com