RIKSBANK CUTS POLICY RATE BY 25BP TO 3.5%

MNI: PBOC Net Drains CNY236.6 Bln via OMO Tuesday

China Repo Rates Rise On Tuesday

MNI: PBOC Sets Yuan Parity Lower At 7.1325 Tues; +2.12% Y/Y

CHINA PBOC CONDUCTS CNY149.1 BILLION VIA 7-DAY REVERSE REPOS TUES

July PPI Shows First Positive Intermediate Goods Inflation Since Apr'23

MNI: GERMANY JUL PRODUCER PRICES -0.8% Y/Y

Headline Consumer Sentiment Softens, House Price Expectations Rise Further

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Eurodollar/Treasury Futures/Options Roundup

US
Another volatile day for stocks Tue, similar to late Mon's sharp rebound to finish higher, shares staged a second half rally back near steady -- but pared more than half the bounce after the FI close.
  • Otherwise, Tsy trade was generally subdued trade ahead Wed's FOMC policy annc (no rate change anticipated yet, clearer forward guidance re: liftoff, balance sheet run-off, QT) Main focus on geopolitical risk and headlines re: Russia/Ukraine invasion threat, NATO, US troops on high alert.
  • Limited react to data on day: US NOV FHFA HPI SA +1.1% V +1.1% OCT; +17.5% Y/Y; US CONF BOARD CONSUMER CONFIDENCE 113.8 IN JAN V DEC 115.2.
  • Tsy futures holding near middle of weaker session range with mild short covering after $55B 5Y note auction (91282CDT5) stops through: 1.533% high yield vs. 1.547% WI; 2.50x bid-to-cover vs. December's 2.41x.
  • Indirect take-up: climbs to 68.72% vs. Dec's 2021 year high of 65.66%. Primary dealer take-up: recedes 14.80% vs. 20.02%; Direct take-up 16.48% vs. 14.32%.
  • Eurodollar option flow: Liftoff Positioning, 50Bp June hike in addition to 25bps liftoff from Fed in March. EDM2 currently trading 99.265: +5,000 Jun 98.93/99.00/99.06/99.12 put condors, 1.0 vs. 99.29/0.05%
  • Elsewhere, targeting five 25bp quarterly hikes starting this March through March 2023, paper adding to bear curve (Whites/Greens) steepener: +15,000 short Mar 98.50/Green Mar 98.00 put spds, 0.25/Greens over
  • The 2-Yr yield is up 6.2bps at 1.0333%, 5-Yr is up 2.2bps at 1.5691%, 10-Yr is up 1.1bps at 1.7814%, and 30-Yr is up 1.4bps at 2.1258%.
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