November 18, 2022 10:26 GMT
Gilts Underperforming, EGBs Eyeing TLTROS
BONDS
Core FI is under a bit of pressure early Friday, with equities on the front foot and the dollar a little weaker.
- Gilts are underperforming global peers, with bear flattening in the UK curve following Thursday's budget announcement and stronger-than-expected retail sales data earlier today. BoE's Haskel speaks after the cash close.
- Most attention this morning is on the announcement of early TLTRO repayments by European banks, due at 1205CET/1105GMT/0605ET. Total size repaid today is seen at E600bln but estimates vary widely.
- ECB hike pricing a little firmer; Lagarde reiterated "expect to raise raise rates further".
- The US curve is a little flatter with the belly underperforming, though 2s10s are off the lows. In today's session we get existing home sales data and commentary from FOMC's Collins.
Latest levels:
- Dec 10-Yr futures (TY) down 8/32 at 112-12 (L: 112-06.5 / H: 112-25.5)
- Dec Bund futures (RX) down 56 ticks at 139.45 (L: 139.17 / H: 140.5)
- Dec Gilt futures (G) down 75 ticks at 105.35 (L: 105 / H: 106.15)
- Dec BTP futures (IK) down 29 ticks at 118.08 (L: 117.48 / H: 118.99)
- Italy / German 10-Yr spread 0.1bps tighter at 191.6bps
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