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GBP LIBOR FIX - 26-10-2021


USD LIBOR FIX - 26-10-2021


(Z1)‌‌ Heading South


Post-LIBOR Settle Update


EURGBP extends its decline



Fig. 1: UK Confirmed Coronavirus Cases (millions)

Source: MNI - Market News/Bloomberg


BREXIT: Boris Johnson and European Commission president Ursula von der Leyen have begun an intensified phase of "hotline" talks as the two sides strive to agree a Brexit trade deal by Wednesday night. Michel Barnier, the EU's chief negotiator, told ambassadors on Tuesday evening that the latest UK offer on fishing rights — the key remaining sticking points in the talks — was unacceptable. But he stressed that negotiations were continuing, with many other issues already solved or close to being settled, according to participants at the closed-door briefing. (FT)

BREXIT: Mr Barnier told ambassadors the UK proposal that the EU transfer 35% of the value of fish caught by EU boats in UK waters to the British fleet did not include pelagic stocks, and that if it did the UK offer would be closer to 60%. He told ambassadors that the EU's offer of 25% of the value of fish caught in UK waters was final. "If you compare like with like it's 60% versus 25%, that's the real figure," said one EU official. "It's not 35% versus 25%." It is understood that Mr Barnier said the UK was also excluding any access for European boats to its six-mile to 12-mile fishing zone. (RTE)

BREXIT: European Union member states consider their latest offer on fisheries in UK trade talks as final, a senior EU diplomat told Reuters after an update on Brexit by the bloc's negotiator, Michel Barnier. "There is still serious concern on the level playing field and blockage on fish," said the senior diplomat, who spoke on condition of anonymity, adding that the latest UK offer on allocating the catch from 2021 was "not acceptable". (RTRS)

BREXIT: Mr Barnier told ambassadors that the EU side was prepared to negotiate until the end of the year, when Britain's post-Brexit transition period will end, and even beyond. (FT)

BREXIT: A UK official said that while the teams "continue to work hard to find an agreement", there were still "significant gaps" between the two sides. "We will not extend the transition period," they said. Mr Barnier told ambassadors even if a deal missed the deadline, Brussels would be prepared to continue negotiating. That would mean a short no-deal period of trading on WTO terms. "The EU will not close its door to the UK and remains ready to negotiate even beyond Jan 1," one EU diplomat said. (Telegraph)

BREXIT: A BBC reporter tweeted the following on Tuesday: "EU diplomat tells me Michel Barnier didn't give a sense of timing to member states: whether a deal might be agreed tomorrow or after Christmas or not till next year (if the two sides continued negotiating into the new year which U.K. officials say they won't)." (MNI)

BREXIT: A BBC reporter tweeted the following on Tuesday: "Barnier has told EU countries: Diplomat: Progress has been made. Most issues are preliminarily closed or close to being agreed. But says differences on fisheries remain difficult to bridge." (MNI)

BREXIT: ITV political editor Peston tweeted the following on Tuesday: "A UK source now says agreement on a UK/EU trade deal is again possible tomorrow. Presumably because, says a separate source, there was movement late tonight on access to the 6-12 mile zone, ocean fishing and the sanctions regime after the interim period of moving towards new quotas. So there will either be a deal tomorrow. Or the following Wednesday. Or - presumably - never." (MNI)

BREXIT: One diplomat told RTÉ News that a deal may not be ready in time for the 31 December deadline. The AFP news agency, quoting sources, said Mr Barnier could not guarantee that there would be a deal, but that "our door will remain open until the end of the year and beyond, as well (RTE)

BREXIT: Irish Prime Minister Micheál Martin said he now believes British and European Union negotiators are more likely than not to strike a post-Brexit trade deal, but that talks may go beyond Christmas Day. "I would like to see it happenIng before Christmas, it could go beyond Christmas Day. There are political factors at play," Martin told a news conference on Tuesday. (RTRS)

BREXIT: The U.K. and Canada reached a temporary agreement to prevent tariffs on goods and services between the two countries starting on Jan. 1, when the U.K. will no longer be covered by Canada's trade deal with the European Union. (BBG)

CORONAVIRUS: A swathe of areas hit by surging Covid-19 rates are likely to be placed into Tier 4 restrictions from Boxing Day, ministers will announce on Wednesday. Ministers are expected to sign off plans for tougher measures for many areas at a meeting of the Covid-O operations committee on Wednesday morning, as concern grows about the virus mutation spreading from the South East. Government sources have warned that there is a "high chance" of a full national lockdown in the new year. (Telegraph)

CORONAVIRUS: Britain struck a deal on Tuesday night for France to lift its travel ban and allow the mass testing of freight drivers in a bid to end the ports chaos. Mobile units, overseen by Army logistics experts, will administer the tests to at least 6,000 freight drivers stranded in the UK, but Government sources admitted it would take several days to clear the truckers. It will be a major logistical task to test drivers at their cabs, organise paperwork, check it at borders and coordinate crossings for the stranded hauliers before they travel to pick up replenishment stocks and return them to Britain. (Telegraph)

CORONAVIRUS: Germany has extended its ban on travellers arriving from the UK to 6 January, despite the EU telling countries to lift restrictions to allow essential journeys and minimise trade disruption. "The German government has extended its ban on air passenger flights arriving from the UK to Germany to a ban on all forms of transport until Wednesday 6 January 2021," the Foreign Office travel advice for the country states. (Sky)

CORONAVIRUS: The U.S. government does not intend to impose Covid-19 screenings for passengers traveling from Britain after the emergence of a highly infectious new coronavirus variant there, people briefed on the decision said. White House coronavirus task force members backed requiring negative pre-flight tests after a meeting on Monday, but the Trump administration has decided not to take any action for the time being, the people said. (RTRS)

BOE: The Bank of England must have a "laser focus" on keeping inflation expectations in check after the pandemic, Chief Economist Andy Haldane said, highlighting the tricky balance the nation faces in managing its massive debt burden. While the BOE is willing to let price growth temporarily overshoot its 2% target as the economy emerges from the current crisis, there can be no question of letting that sentiment become entrenched, he said. Any country that lets inflation expectations spike would see bond yields rise, boosting the cost of debt repayments and undermining the recovery. (BBG)

ECONOMY: November saw the lowest number of planned redundancies in Britain since Covid lockdowns began, according to Insolvency Service data. In total 36,700 redundancies were proposed last month, down from a peak of 156,000 in June. The figures suggest that the chancellor's decision to extend the furlough scheme to the spring has helped to protect jobs. The data was released in response to a BBC Freedom of Information request. (BBC)


PORTUGAL: The Portuguese government approved an increase in the monthly minimum wage to 665 euros in 2021 from 635 euros at present, Gabriel Bastos, the secretary of state for social security, says after a weekly cabinet meeting on Tuesday. Bastos reiterates his government's plan to raise the monthly minimum wage to 750 euros in 2023. (BBG)


FED: MNI BRIEF: Banks Eye Better Treasury Transactions- Fed Survey

  • Roughly half of U.S. dealers have reevaluated the amount of capital and available funds committed to Treasury intermediation on a daily basis due to the stress events brought on by Covid in March, according to a Federal Reserve survey released Tuesday. Three-fifths of dealers indicated that during March their most constrained service was the provision of immediacy of execution in buying and selling securities, the Fed said in a special section of its quarterly Senior Credit Officer Opinion Survey - on MNI Main Wire and email now - for more details please contact

FED: MNI BRIEF: Fed Sets Out To Replace IOER, Simplify Rate Formula

  • The U.S. Federal Reserve announced Tuesday it is taking a formal step to take the interest on required reserves rate and the interest on excess reserves rate and replacing them with a single "interest on reserve balances" ("IORB") rate - on MNI Main Wire and email now - for more details please contact

FISCAL: President Donald Trump threatened on Tuesday to not sign an $892 billion coronavirus relief bill that includes desperately needed money for individual Americans, saying it should be amended to increase the amount in the stimulus checks. U.S. government operations are being funded on a temporary basis through Dec. 28, waiting for the $1.4 trillion in federal spending for fiscal 2021 that is also part of the bill. Failure to either pass another stopgap bill or override a possible Trump veto of the legislation could result in a partial government shutdown. The threat by the outgoing Republican president, who has less than a month left in office, throws into turmoil a bipartisan effort in Congress to provide help for people whose lives have been upended by the pandemic. (RTRS)

FISCAL: President-elect Joe Biden warned the "darkest days" of the coronavirus pandemic were still to come and called on Congress to be ready early next year to produce another stimulus package, even though the most recent one took months to complete. "Our darkest days in the battle against Covid are ahead of us, not behind us," he said at a year-end news conference in Wilmington, Delaware. (BBG)

CORONAVIRUS: Hospitalisations related to coronavirus in the US rose to a record high of more than 117,000, following a surge in infections from the autumn. There were 117,777 patients in hospital with Covid-19, up from 115,351 the day before, according to Financial Times analysis of Covid Tracking Project data published on Tuesday. (FT)

CORONAVIRUS: Massachusetts will tighten limits on indoor gatherings and business activity after Christmas in hopes of slowing the spread of coronavirus, as governor Charlie Baker said hospitalisations "skyrocketed" after the Thanksgiving holiday. (FT)

CORONAVIRUS: The new coronavirus strain that was first detected in the United Kingdom could already be circulating in the United States without notice, the U.S. Centers for Disease Control and Prevention said Tuesday. (CNBC)

CORONAVIRUS: The Trump administration and Pfizer are close to a deal under which the pharmaceutical company would bolster supply of its coronavirus vaccine for the United States by at least tens of millions of doses next year in exchange for a government directive giving it better access to manufacturing supplies, people familiar with the discussions said. An agreement, which could be announced as early as Wednesday, would help the United States at least partly offset a looming vaccine shortage that could leave as many as 110 million adult Americans uncovered in the first half of 2021. (New York Times)

CORONAVIRUS: President-elect Joe Biden's coronavirus advisory team consulted scientists and supply chain experts about whether he should invoke a wartime production law to help produce and administer more Covid-19 vaccines, two advisers familiar with the discussions said. President Donald Trump has already invoked the Defense Production Act, or DPA, to speed the production of medical supplies and components to test for the coronavirus, and he has raised the possibility of using the law again for vaccines. Manufacturers have said there could be a shortage of components to make the vaccines. (NBC)

CORONAVIRUS: One in three Americans believe their physical and mental health will be better next year as more people say they plan to get the COVID vaccine as soon as it's available, in the latest installment of the Axios/Ipsos Coronavirus Index. (Axios)

POLITICS: Officials at the Office of the U.S. Trade Representative appointed by President Donald Trump are delaying the transition to President-elect Joe Biden's team by refusing to schedule meetings, according to officials with knowledge of the situation. (POLITICO)

POLITICS: President Donald Trump on Tuesday issued pardons to 15 people, including those convicted as part of special counsel Robert Mueller's investigation, and commuted some or all of the criminal sentence of five others. Those granted pardons include former congressmem Duncan Hunter of California, New York's Chris Collin, and Steve Stockman of Texas. (CNBC)

MONEY MARKETS: A high-powered group of U.S. regulators cited money market mutual funds as a key source of stress during March's pandemic-fueled market turmoil, while making a number of recommendations on how to make the investments more resilient during the next crisis. The President's Working Group on Financial Markets pointed to money market funds as significant buyers of assets that experienced distress earlier this year, including Treasuries, commercial paper and short-term municipal securities, according to a report released Tuesday. The group said a top concern is that investors expect the funds to be highly liquid but that's not always the case when markets go haywire. (BBG)

EQUITIES: A portion of New York Stock Exchange workers will return to remote working amid a surge in Covid-19 cases. (CNBC)

EQUITIES: The Securities and Exchange Commission will allow companies to raise capital through direct listings, opening the door to a new alternative to the traditional initial public offering. The SEC approved the new kind of direct listing—which could help startups save on bank fees and capture more of the gains in their share price when they go public—in an order posted on its website Tuesday. (WSJ)

EQUITIES: The Trump administration sued Walmart Inc. Tuesday, accusing the retail giant of helping to fuel the nation's opioid crisis by inadequately screening for questionable prescriptions despite repeated warnings from its own pharmacists. (WSJ)


U.S./CHINA: The Department of Homeland Security is set to issue an advisory to U.S. businesses, warning them of data security risks associated with using communications equipment and services from China-linked companies. (Axios)

U.S./CHINA: China will retaliate in response to the U.S. adding 58 Chinese firms to its "Military End User" list, the Ministry of Commerce said late on Tuesday. Companies included in the MEU list, many in the aviation sector, will be blocked from buying U.S. technology, MNI noted. China urges the U.S. to stop unilateral and bullying practices and give fair treatment to companies from all countries, the ministry said. (MNI)

GEOPOLITICS: The incoming administration of Joe Biden has voiced its concern about EU-China negotiations over a business investment agreement amid unease that it will not be tough enough on prohibiting forced labour in China. Jake Sullivan, who will serve as national security adviser to Mr Biden, tweeted that the new administration would "welcome early consultations with our European partners on our common concerns about China's economic practices". (FT)

GEOPOLITICS: Japan will expand its fleet of large coast guard patrol vessels around the Senkaku Islands by nearly half before April 2023 in response to the record number of Chinese ships that have sailed through those waters this year. (Nikkei)

CORONAVIRUS: British drugmaker AstraZeneca Plc told Reuters on Tuesday its COVID-19 vaccine should be effective against the new coronavirus variant, adding that studies were under way to fully probe the impact of the mutation. "AZD1222 (AstraZeneca's vaccine candidate) contains the genetic material of the SARS-CoV-2 virus spike protein, and the changes to the genetic code seen in this new viral strain do not appear to change the structure of the spike protein," an AstraZeneca representative said in an email. (RTRS)

CANADA: MNI REALITY CHECK: Canada GDP Gain May Be Last Before 2nd Wave

  • Canada's economy has another major hit coming from the second wave of Covid-19, bringing an end to gains rung up as firms adapted over the summer, executives told MNI - on MNI Main Wire and email now - for more details please contact

MEXICO: Some automakers in North America are asking for more time to meet stringent content rules set out in a new trade agreement, and Mexico is making progress on changes in labor standards under the deal, a top Mexican official said. The United States-Mexico-Canada Agreement (USMCA), which took effect in July, replacing the 1994 North American Free Trade Agreement (NAFTA), includes tougher content rules for autos. (RTRS)

RUSSIA: President-elect Joe Biden said Tuesday that his administration will retaliate for a massive cyberattack that targeted U.S. government agencies and is believed to have been carried out by Russian hackers. "When I learn the extent of the damage and in fact who is formally responsible, they can be assured that we will respond. And probably respond in kind. There's many options, which I will not discuss now," Biden said during a press conference with reporters that followed his remarks on the coronavirus pandemic, cybersecurity and the upcoming Christmas holiday. (Yahoo Finance)

ISRAEL: Israel is to hold its fourth elections in two years after the two main parties in its unity government failed to meet a deadline in a row over state budgets. Voters will return to the polls in March, just 12 months after the last round. Two previous elections were inconclusive, resulting in a rare government of national unity. Prime Minister Benjamin Netanyahu, on trial for alleged corruption, is hoping to return to office for a sixth time. He denies the criminal charges against him, dismissing them as politically motivated. (BBC)


BONDS: National Development and Reform Commission will start overall check on repayment risks of corporate bonds due end-2020 and 2021, according to a statement on the commission's website. Local NDRC agency should set up working group and make corresponding plan for corporate bonds that are found to have repayment risks. For bonds that have already defaulted, local agency should strengthen communications with related parties to push forward the risk disposal. NDRC also plans a close inspection on existing corporate bonds. (BBG)

DEBT: China is banning local governments from raising off-balance sheet debt in the form of corporate debt, or through illegal financing with financial institutions, wrote Minister of Finance Liu Kun in the People's Daily. China will advance its debt-ratio based local government risk assessment systems and solvency tests to strengthen risk prevention, Liu wrote. China will improve the direct tax system centered on income and property taxes, and increase their proportion in total tax revenue, wrote Liu. (MNI)

SMES: China will extend policies offering loan payment deferrals to small private businesses into Q1 next year and continue credit support, the State Council said in a statement following an executive meeting. Banks and SME borrowers should negotiate to extend payments beyond Q1, the statement said. Qualified local banks lending to SMEs will continue to receive government funding of up to 40% of the loan principal, the government said. (MNI)







The People's Bank of China (PBOC) injected CNY10 billion via 7-day reverse repos and CNY100 billion via 14-day reverse repos with rates unchanged on Wednesday. This resulted in a net injection of CNY100 billion given the maturity of CNY10 billion of reverse repos today, according to Wind Information.

  • The operations aim to maintain stable liquidity at the end of the year, the PBOC said on its website.
  • The 7-day weighted average interbank repo rate for depository institutions (DR007) rose to 2.2000% at 09:25 am local time from 1.8860% at Tuesday's close.
  • The CFETS-NEX money-market sentiment index closed at 35 on Tuesday vs 38 on Monday. A lower index indicates decreased market expectations for tighter liquidity.


The People's Bank of China (PBOC) set the dollar-yuan central parity rate slightly higher at 6.5558 on Wednesday, compared with the 6.5387 set on Tuesday.


SNAPSHOT: It's Never Straight Forward With Donald

Below gives key levels of markets in the second half of the Asia-Pac session:

  • Nikkei 225 up 90.49 points at 26527.13
  • ASX 200 up 43.531 points at 6643.1
  • Shanghai Comp. up 30.82 points at 3387.602
  • JGB 10-Yr future unch. at 152.13, yield down 0.4bp at 0.006%
  • Aussie 10-Yr future up 3.0 ticks at 99.025, yield down 2.6bp at 0.924%
  • U.S. 10-Yr future +0-02 at 138-01+, yield down 1.0bp at 0.906%
  • WTI crude down $0.73 at $46.29, Gold up $6.52 at $1867.37
  • USD/JPY down 19 pips at Y103.45

BOND SUMMARY: Trump Throws A Spanner In The Works

Activity has cooled after the Trump-inspired push higher, with T-Notes a little shy of best levels, last +0-01+ at 138-01, operating within a 0-04 range, while the light twist flattening of the cash curve has held, with 30s ~1.0bp richer on the day. Eurodollar futures sit unch. to +0.5 through the reds, with a 20K block seller of EDH1 providing the highlight on the flow side thus far.

  • The broader offshore market dynamic and lack of impending long dated JGB issuance made for some outperformance for the longer end of the Japanese curve, although futures still held to a narrow range, last -1, with the belly of the cash curve experiencing some underperformance. There has been a lack of local news flow to drive matters.
  • The Aussie curve pushed flatter in early Sydney trade, but the space has edged away from richest levels, with YM +1.0 and XM +3.0, as focus fell on the U.S. fiscal backdrop, not local data releases. 3-Month BBSW fixed at an all-time low of 0.010% today (we gave some colour on the matter yesterday). Bills sit -1 to +1 through the reds, running flatter vs. settlement.

EQUITIES: Slight Divergence

A slight degree of divergence crept in during Asia-Pac hours, with e-minis ticking lower on the back of the well-documented U.S. fiscal issues, as President Trump pushed for more substantial stimulus checks for individuals (he is looking for $2,000 per person vs. the $600 per person that was seen in the Bill that recently passed through Congress). E-minis have recovered from worst levels, with questions re: the timeliness of the fiscal support at the fore i.e. a case of when, not if, support will come.

  • Meanwhile, the major Asia-Pac indices edged higher.
  • The PBoC continues to add liquidity to the system to account for the upcoming calendar new year.
  • There was little else in the way of meaningful macro headline flow.
  • Nikkei 225 +0.4%, Hang Seng +0.4%, CSI 300 +1.0%, ASX 200 +0.5%.
  • S&P 500 futures -5, DJIA futures -27, NASDAQ 100 futures -12.

OIL: Struggling

WTI and Brent sit ~$0.65 below settlement levels, with questions surrounding the potential for timely implementation of the U.S. fiscal support package evident in the wake of U.S. President Trump's well-documented lambasting of the current Bill.

  • Another surprise headline crude stock build in the latest round of weekly API inventory estimates was also seen ahead of Asia-Pac hours, which applied pressure to the space in post-settlement trade and was accompanied by mixed product metrics and fairly flat Cushing inventory levels.
  • Continued worry re: the recent COVID mutation centring on the UK and its knock-on impact for fuel demand pressured crude on Tuesday, although the benchmarks managed to recover from worst levels of the day (although Tuesday's lows are being tested at present).
  • The weekly DoE inventory data headlines on Wednesday.

GOLD: Monday's Range Holds

Spot has stuck within the range established on Monday, with the dynamic in the USD the more dominant driver over the last 24 hours or so. Bullion last deals around the $1,865/oz mark, a handful of dollars higher on the day and within the confines of the previously outlined technical parameters.

FOREX: Greenback Underperforms, Familiar Themes In Play

Familiar themes continued to grab attention, as U.S. fiscal matters, Brexit & global Covid-19 situation provided the main talking points. Price action across G10 FX space was subdued, with USD underperforming ahead of the Christmas break & with DXY moving away from Tuesday highs. U.S. Pres Trump's demand to rewrite certain parts of the Covid-19 relief bill inspired little in the way of immediate, material reaction in the greenback.

  • Sterling firmed up a tad as Brexit news flow remained front and centre, with EU Chief Negotiator Barnier noting that both sides were ready for a "final push." A tweet from ITV's Peston citing a UK gov't source as seeing a deal on the table today added to hopes for a positive resolution to the dragged-out talks.
  • AUD climbed to the top of the G10 scoreboard in thin, pre-holiday trade, despite familiar risks. AUD/NZD moved through the NZ$1.0700 mark and consolidated just above there, ahead of today's expiry of A$684mn worth of options with strikes at that round figure.
  • Bank Indonesia stepped in to shore up the rupiah for the second consecutive day, intervening on spot FX interbank market & via brokers. The Bank cited the need to maintain IDR stability amid global risk-off environment.
  • THB was rangebound ahead of the monetary policy decision from the BoT, with policymakers expected to express discomfort with the baht strength.
  • U.S. initial personal income/spending, jobless claims, flash durable goods orders, new home sales & final U. of Mich. Sentiment, Canadian GDP & Italian confidence gauges take focus today.

FOREX OPTIONS: Expiries for Dec23 NY cut 1000ET (Source DTCC)

  • EUR/USD: $1.2150(E749mln), $1.2200-10(E1.1bln), $1.2250(E951mln-EUR puts), $1.2275-80(E955mln-EUR puts)
  • USD/JPY: Y101.00($780mln), Y103.00($1.57bln-USD puts)
  • GBP/USD: $1.3600(Gbp638mln)
  • EUR/GBP: Gbp0.8800-15(E630mln-EUR puts), Gbp0.9145-50(E656mln-EUR puts)
  • AUD/NZD: N$1.0700(A$684mln-AUD puts)

UP TODAY (Times GMT/Local)