MNI China Daily Summary: Monday, November 18

MNI BRIEF: China’s October Youth Employment Rate Remains High

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CHINA PBOC CONDUCTS CNY172.6 BLN VIA 7-DAY REVERSE REPOS MON

Japan Sep Machine Orders -0.7% M/M

EZ/UK Bond Supply Calendar: EU Synd; SK, BE Auction on Monday

MNI: US SEP BUSINESS INVENTORIES +0.1%; SALES +0.3%

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MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

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BUNDS: Call/Put Skew Fades Further, Despite Dovish ECB Repricing

BUNDS
BundesbankCentral Bank NewsCEEMEAEurozoneGermanyBulletGlobalFixed Income BulletsRegionMarkets

The latest round of dovish ECB repricing hasn’t generated much in the way of upside demand for Bunds (via options), as fiscal/supply concerns continue to limit rallies/weigh on core global FI long ends.

  • We have already flagged the pressure on German ASWs on numerous occasions, but this dynamic is also observable in the Bund call/put skew (based on 1-month 25-delta options).
  • That measure is on track to close at the lowest level since July.

Fig. 1: Bund Call/Put Skew (1-Month 25-Delta Options)

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The latest round of dovish ECB repricing hasn’t generated much in the way of upside demand for Bunds (via options), as fiscal/supply concerns continue to limit rallies/weigh on core global FI long ends.

  • We have already flagged the pressure on German ASWs on numerous occasions, but this dynamic is also observable in the Bund call/put skew (based on 1-month 25-delta options).
  • That measure is on track to close at the lowest level since July.

Fig. 1: Bund Call/Put Skew (1-Month 25-Delta Options)

Keep reading...Show less