MNI: PBOC Conducts CNY2 Bln Via OMO Thurs; Liquidity Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS THURS

MNI: PBOC Sets Yuan Parity Lower At 7.1339 Thurs; -1.06% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1339 THURS VS 7.1342

MNI BRIEF: Bank of Korea Keeps Policy Rate At 3.50%

MNI: BANK OF KOREA KEEPS POLICY RATE AT 3.50%: PRESS

Activity data stronger-than-expected; little impact on near-term monpol

MNI: GERMANY JUNE FINAL HICP +2.5 % M/M, +0.2% Y/Y

MNI: GERMAN JUN CPI +2.2 % Y/Y

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Post-LIBOR Settle Update: Calendar Spds Extend Inversion

US EURODLR FUTURES

Lead quarterly Dec'22 (EDZ2) extends low to 94.940 (-0.050) after latest 3M LIBOR set' climbs +0.02486 to new 14 year high of 4.43957% (+0.04029/wk).

  • A 75bp hike at next week's FOMC fully priced, pricing another 75bp hike in Dec debatable after Wed's lower than exp 50bp hike to 3.75% from the BoC while the ECB hiked 75bp Thu but signaled data dependence.
  • Futures unwinding appr half of Thu's move this morning, however w/balance of Whites (EDH3-EDU3) trade -0.060-0.080, Reds (EDZ3-EDU4) -0.090-0.105, Greens through Golds (EDZ4-EDU7) -0.120-0.120.
  • Deferred calendar spds extend inversion to new cycle lows this morning: indicating a larger ease in current hikes over the latter half of 2023: Mar'23/Jun'23 -0.095; Dec'22/Red Dec'23 at -0.415, Mar'23/Red Mar'24 at -0.725, Jun'23/Red Jun'24 at -0.815. Inversion flattens out in front half of Blues.
  • Thursday FI option trade centered on two-way call positioning as opinion over FOMC hike pricing into year-end fluctuated. Much better Tsy option volumes, Eurodollar volumes scant.
    • Some highlight trade/blocks included: +10,000 TYZ2 113.25 calls, 35 ref 111-21 followed by another 12k on screen soon after. Same premium paid for the TYZ 113 calls a few minutes prior - moving up strikes as underlying continues to rally.
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