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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.
LONDON (MNI) -
Fig 1: US Durables Goods Orders, % M/M
Source: MNI, Bloomberg
The themes of the morning have continued with Bunds moving higher and peripheral spreads widening.
- Markets continue to focus on a potential second wave of Covid cases in Spain but there is little more colour on the situation than this morning.
- Spanish spreads haven't been hit any more than other peripheral spreads with all peripherals seeing spreads around 4bp wider on the day.
- This is despite Spanish stocks being hit harder than other stocks across the region.
- Bund futures are up 0.61 today at 176.70 with 10y Bund yields down -3.6bp at -0.485% and Schatz yields down -1.2bp at -0.674%.
- BTP futures are up 0.08 today at 146.97 with 10y yields up 0.3bp at 0.999% and 2y yields up 0.9bp at -0.64%.
- OAT futures are up 0.54 today at 168.39 with 10y yields down -3.3bp at -0.182% and 2y yields down -0.8bp at -0.628%.
GILT SUMMARY: BULL FLATTENING
Gilts have remained bid through the session with yields edging down to the lows of the day, alongside weak trading in equities.
- The Sep-20 Gilt future has traded up to 138.31, near the top of the day's range and 3 ticks off the high. -
- Cash yields are 1-2bp lower and the curve has bull flattened with the 2s10s spread 2bp narrower on the day.
- Current yield levels: 2-year -0.1063%, 5-year -0.1259%, 10-year 0.1148%, 30-year 0.6290%
- The DMO will tomorrow sell the 1.625% Oct-54 Gilt for GBP1.5bn and the 1.25% Jul-27 Gilt for GBP2.75bn.
- Tomorrow will see the release of the Lloyds Business Barometer for July, as well as the CBI Retailing Reported Sales data for the same month
OPTIONS/FUTURES FLOW:
EGB options flow included:
RXU0 176.00/174.50 ps, bought for 32 in 300 vs DUU0 112.00/111.80ps, sold at 3 in 2.4k
DEBT SUPPLY:
FRANCE T-BILL AUCTION RESULTS: FRANCE SELLS E7.39BN OF BTFs VS E6.2-7.4BN TARGET
- E3.495bn of 3-month BTFs: Average yield -0.565%, bid-to-over 2.41x
- E1.996bn of 6-month BTFs: Average yield -0.562%, bid-to-over 3.09x
- E1.895bn of 12-month BTFs: Average yield -0.556%, bid-to-over 2.73x
LOOK AHEAD:
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.
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