MNI US MARKETS ANALYSIS - TLTRO Repayments Come in Light

US TSYS: Weaker Ahead Boston Fed Collins, Housing Data

• Boston Fed Collins expected to speak at a Labor Market conference (text, no Q&A) at 0840ET - and again at 1000ET w/ CNBCs Steve Liesman.
  
• Limited data after a heavy docket last couple days: Existing Home Sales (4.71M , 4.38M est vs. 4.71M prior) MoM (-7.1%) and Leading Index (-0.4%) at 1000ET.
  
• No Tsy auctions or corporate bond issuance on the day limiting hedging flows, trading desks wary of adding risk ahead weekend and next week's Thanksgiving holiday.
• STIR: Eurodollar/SOFR 2023 futures levels remain under pressure as Fed terminal rate climbs to 5.015% from 4.99% in Jun'23 late Thu (5.08% pre-CPI). Fed funds implied hike for Dec'22 steady 50.9bp, Feb'23 cumulative +1.3bp to 87.7bps to 4.730%, Mar'23 cumulative 106.4bp to 4.918%.
  

TLTRO Repayment Comes In Low: Relief For Euribor But Not For Swap Spreads

The early TLTRO repayment of E296.23bln (of E2.1T outstanding) in the November window was definitely at the very low end of expectations, which went as high as E1.5T.

• The bulk of it is E212.4bln by 174 counterparties in the June 18 2020 tender (which had E1.3T allotted originally, maturing June 2023 - the majority of outstanding TLTROs).
• Expectations were divided whether either the Nov or Dec or Jan windows would be the busiest.
• But the tick higher in ER contracts suggests some relief that liquidity wasn't drained too quickly going into year-end, with perhaps some caution by banks on that front.
• German swap spreads are a little wider too, perhaps surprisingly so given that expectations weren't too strong that quality collateral would have been released following the repayments anyway.

APEC Leaders Issue Statement; Harris: No Better Partner For APEC Than US

The Asia-Pacific Economic Cooperation group has issued a broad joint ministerial statement following the leaders' summit in the Thai capital Bangkok.

• Link to statement: https://www.apec.org/meeting-papers/annual-ministe...
• Delivering her keynote speech to the summit, US Vice President Kamala Harris stated that “The United States has an enduring economic commitment to the Indo-Pacific... And there is no better economic partner for this region than the United States of America".
• Despite Harris' comments, the attendance of Chinese President Xi Jinping made US President Joe Biden and Russian President Vladimir Putin notable by their absence.
• In contrast to the broad global G20 summit, where at least half of the attendees are staunch US allies, the APEC summit encompassing Pacific Rim nations is seen as more of a geopolitical chessboard, with the US and China both seeking to expand their sphere of influence in the region.
• As was the case at the G20 summit in Bali, Indonesia earlier this week, the APEC summit offered condemnation of the Russian invasion of Ukraine, but with caveats, stating that, "We reiterated our positions [...] which [...] deplores in the strongest terms the aggression by the Russian Federation against Ukraine [...] Most members strongly condemned the war in Ukraine [...] There were other views and different assessments of the situation and sanctions...."

FOREX: Greenback Softer Ahead of NY, But Yield Gains Could Limit Downside

• The greenback is offered early Friday, with EUR/USD and GBP/USD through the overnight lows and Thursday's best levels under pressure ahead of the NY crossover. US yields are inching higher, with the 10y showing back above 3.80% - which could limit the USD's weakness headed into the crossover.
• AUD and NZD are among the strongest in G10, gaining alongside European equity markets and ahead of the November RBNZ decision next week, at which the bank are seen raising rates a further 75bps.
• GBP is also trading well, with GBP/USD reversing the entirety of the post-budget losses, aided by better-than-expected retail sales which rose 0.6% on the month to bounce off September weakness.
• US data quietens down Friday, with just existing home sales and the October leading index on the docket. ECB's Nagel & Knot, BoE's Mann & Haskel and Fed's Collins make up the speaker slate.