RBA SAYS SOME UPSIDE INFLATION RISKS HAVE EASED.

MNI: RBA LEAVES CASH RATE AT 4.35%

CHINA NOV EXPORTS +6.7% Y/Y VS MEDIAN +8.9% Y/Y: CUSTOMS

MNI: CHINA YTD EXPORTS +6.7% Y/Y IN YUAN TERM: CUSTOMS

MNI: PBOC Net Injects CNY90.3 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1896 Tues; -1.71% Y/Y

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

EZ/UK T-Bill Calendar: Spain, Belgium Auction on Tuesday

MNI:US OCT WHOLESALE INV 0.2%; SALES -0.1%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BONDS: Bunds Underperform Gilts Amid Cautious ECB Speak

BONDS
BulletMarketsFixed Income Bullets

Bund futures underperform Gilts, with this morning’s more cautious ECB-speak seemingly outweighing lower-than-expected consumer inflation expectations and stronger-than-expected money supply growth.

  • ECB’s Wunsch and Vujcic both consider the discussion of a 50bp cut in December to be premature, while Simkus provided more forceful pushback.
  • ECB-dated OIS continue to assign a ~40% implied probability of a 50bp cut next meeting,
  • The German IFO survey was stronger-than-expected, broadly mirroring yesterday’s flash PMI release.
  • UK headline flow has been limited, with focus still on speculation ahead of next week’s budget, which has been an important driver of the near-10bp widening of the Gilt/Bund spread since Wednesday.
  • Bund futures are -41 ticks at 133.10, with Gilt futures -11 ticks at 96.17.
  • The 10-year Gilt/Bund spread has tightened almost 3bps to 194bps.
  • 10-year peripheral spreads to Bunds are little changed. BTP Short Term and BTPei supply was digested smoothly.
  • Moody’s review France’s sovereign credit rating after hours (current rating: Aa2; Outlook Stable). At least an outlook downgrade seems likely.
157 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Bund futures underperform Gilts, with this morning’s more cautious ECB-speak seemingly outweighing lower-than-expected consumer inflation expectations and stronger-than-expected money supply growth.

  • ECB’s Wunsch and Vujcic both consider the discussion of a 50bp cut in December to be premature, while Simkus provided more forceful pushback.
  • ECB-dated OIS continue to assign a ~40% implied probability of a 50bp cut next meeting,
  • The German IFO survey was stronger-than-expected, broadly mirroring yesterday’s flash PMI release.
  • UK headline flow has been limited, with focus still on speculation ahead of next week’s budget, which has been an important driver of the near-10bp widening of the Gilt/Bund spread since Wednesday.
  • Bund futures are -41 ticks at 133.10, with Gilt futures -11 ticks at 96.17.
  • The 10-year Gilt/Bund spread has tightened almost 3bps to 194bps.
  • 10-year peripheral spreads to Bunds are little changed. BTP Short Term and BTPei supply was digested smoothly.
  • Moody’s review France’s sovereign credit rating after hours (current rating: Aa2; Outlook Stable). At least an outlook downgrade seems likely.