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CORN TECHS

(H2) Bullish Focus

BRAZIL

Central Government Budget Balance Due

OIL

WTI gains over $1 in the past 10 minutes

Fig. 1: UK Curve Steepens As Brexit Optimism Is Rekindled


BBG, MNI

EGB SUMMARY: BTP and GGB spreads wider on syndications

After selling off in the early part of the day, Bunds retraced most of their losses before starting to move lower again on headlines that Brexit talks were due to resume shortly, in the hope of a deal by mid-November.

  • Most peripheral spreads are little changed on the day but GGB spreads are wider after the EUR2bln syndicated 15-year tap. BTP spreads are also wider after the MEF announced a syndication for a new 30-year BTP (along with simultaneous buybacks of four BTPs and a CCTeu).
  • Bund futures are down -0.17 today at 175.64 with 10y Bund yields up 1.3bp at -0.594% and Schatz yields up 0.7bp at -0.779%.
  • BTP futures are down -0.32 today at 148.83 with 10y yields up 4.3bp at 0.770% and 2y yields up 1.4bp at -0.323%.
  • OAT futures are down -0.13 today at 169.66 with 10y yields up 1.1bp at -0.318% and 2y yields up 0.3bp at -0.708%.

GILT SUMMARY: Long-End Leading The Sell-Off

Gilts have sold off sharply through the day, with the curve bear steepening.

  • Cash yields are 2-7bp higher and the 2s30s spread 6bp wider. Last yields: 2-year -0.0562%, 5-year -0.051%, 10-year 0.2381%, 30-year 0.8123%.
  • The Dec-20 gilt future trades at 135.90, 10 ticks off the day's low.
  • Data published earlier today showed a slightly weaker than expected September CPI print (0.5% Y/Y vs 0.6% survey) and a higher than expected public sector net borrowing requirement for the same month (GBP35.4bn vs GBP32.4bn consensus).
  • Deputy BoE Governor Dave Ramsden today stressed that there remains plenty of headroom to expand asset purchases.
  • CBI Trends data for October will be published tomorrow at 1100BST.
  • Looking further ahead, GfK Consumer Confidence data for October, retail sales for September and the preliminary October PMI prints will be published on Friday.



DEBT FUTURES/OPTIONS:

  • LG1 100.25c, bought for 0.75 in 25.5k
  • LG1 100.25c, bought again for 0.75 in 2k (27.5k total)
  • LG1 99.87/100^^, sold at 5.5 in 4k
  • LH1 99.875p/100.00c strangle, sold at 6.5 in 4k
  • LH1 99.875/100.00/100.125 call fly bought for 4.75 in 4k
  • LH1 100.00/100.12cs 1x2 trades again for 1 in 1.5k (3k total bought).
  • LM1 100.00^ vs 100.125/100.25cs, sold the straddle and receives 13.5. in 5k (adding position)
  • LM1 100.12/100.37cs 1x1.5, bought for 3.5 in 10k (ref: 100.025)
  • 0LF1 with 0LG! 100.12/100.37c strip, bought for 6.5 in 5k
  • 0LG1 100.00/100.25cs 1x2, bought for 4.5 in 5.5k
  • RXX0 176.0/176.5/177 c ladder, bought for 6 in 1.2k

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