EUR Swaps: Tracking USTs; Big supply arrives

Chart lines
;
Euro fixed income has tracked price action in USTs, meanwhile big supply has arrived via SSA syndications several bank deals.

Start a free trial to read this article

Join today to access all  Total Derivatives content and breaking news. Already a subscriber? Please Log In to continue reading.

Or contact our Sales Team to discuss subscription options.

Get in Touch
Blurred image of Total Derivatives article content

 

  • Tracking USTs; Big supply arrives
  • Long-end steepening bias - JP Morgan
  • New issues

     

    Tracking USTs; Big supply arrives
    The Bund future posted gains for much of today’s session although took a hit and followed US Treasuries lower following mixed US data, see USD Swaps. 


    “It feels very driven and sensitive to US price action at the moment,” said one euro trader. The 10y Bund future was last down 5 ticks while the 10y yield was marked around 2.31% (unch). The EuroStoxx was last +0.1% while the 10y BTP/Bund spread was unchanged at 187bps.


    In euro swaps traders say the focus has been on a huge number of new issues pricing this week. In sovereign supply Belgium is pricing €4bn 20y at swaps +54bps through syndication, “Possibly there’s a bit of asset swap demand and there was a bit more paying flow but overall flows have been quite balanced,” one trader away from the leads reported.


    Meanwhile, swap spreads across the 5y to 30y sector are slightly tighter for a second session as a number of banks and other SSAs including KfW and EIB price new deals. Among those targeting the 10y sector are BNPP €1.25bn 10y, Santander €1.25bn 10.25y NC5.25 and HSBC €1.75bn 10y NC9. KfW and EIB priced a total of €8bn in 7y


    Last Bund ASW prices were Schatz at 81.5bps (+0.2bp), Bobl at 73.5bps (-0.4bp), Bund at 68.7bps (-0.5bp) and Buxl at 32.5bps (-0.5bp).


    Elsewhere, 3s6s basis has eased back after moving sharply higher yesterday with 5y last marked -0.5bp at 7.35bps and 10y -0.15bp at 2.95bps.

     

     

    Long-end steepening bias - JP Morgan
    In its latest rates weekly JP Morgan holds a long-end steepening bias in the euro curve. It writes:


    • "At the long-end of the curve, we keep our medium-term 10s/30s swap curve steepening bias and hold 5y5y/15y5y swap curve steepener as a proxy to 10s/30s. We had rotated our recommendation of 2y2y10y10y swap curve steepener as a proxy to 10s/30s into
      5y5y/15y5y on RV considerations.


    • "The 5y5y/15y5y swap curve has steepened around 3bp over the week versus 1.5bp steepening of the 10s/30s curve. The residual has partly corrected but the proxy still appears to be marginally too flat versus 10s/30s. We keep 5y5y/15y5y swap curve steepener as a proxy to 10s/30s on RV considerations) and thus we keep this trade. We also stay in 10s/30s conditional bull-belly richener implemented via 3m receivers.”

     

    New issues

  • Belgium is pricing €4bn 20y at swaps +54bps through BNP Fortis, Citi, CA (B&D), Nomura and SocGen. Latest order book reported to be above €19bn.

     

  • EIB is pricing €5bn 7y EARN at swaps -4bps through BofA, BNPP (B&D), CA and HSBC. Latest order book reported to be above €35bn.


  • KfW is pricing €3bn 7y Green at swaps -13bps through Danske, Deka, NatWest and SocGen. Latest order book reported to be above €6bn.


  • Johnson Controls, a US company, is pricing EUR 12y Green around swaps +160bps through Barclays, Citi (B&D), DB and Standard Chartered.


  • Prologis Inc, a US company, is pricing €750m 10y at swaps +170bps through BNPP, CA, ING (B&D) and JPM.


  • BNP Paribas is pricing €1.25bn 10y Senior Preferred at swaps +118bps through itself.


  • Santander is pricing €1.25bn 10.25y NC5.25 Subordinated at swaps +285bps through Barclays, BofA, BNPP, DB, Natixis, Nomura, JPM and Santander (B&D).


  • HSBC is pricing €1.75bn 10y NC9 at swaps +190bps through HSBC, CIBC, ING, Natixis, Santander and SEB.


  • Ferrovie SpA is pricing EUR Green 6y at swaps +125bps and 10y at +165bps through Barclays, BNPP, CA, DB, GS, IMI, JPM, MS, Santander (B&D) and UniCredit.


  • Lonza Finance NV is pricing €500m 10y at swaps +100bps through BNPP, BofA, Citi, HSBC and JPM (B&D).

     

  • Berlin Hyp is pricing €750m (max) 7y Green Covered at swaps +9bps through Commerzbank, CA, DZ, JPM and LBBW.


  • KDB, Korean Development Bank, is pricing €750m 5y at swaps +43bps through BNPP, CA, HSBC (B&D), JPM, KDB and Natixis.


  • BNP Paribas Home Loan SFH is pricing €1.25bn 5y Covered at swaps +15bps through BBVA, BNPP, Danske, DZ, IMI, ING, Nordea and Santander.


  • de Volksbank is pricing €500m (max) 4.5y Green SNP at swaps +170bps through BNPP, BofA, Commerzbank, Rabo and Santander.


  • Raiffeisen is pricing €500m (max) long 4y Covered at swaps +45bps through Commerzbank, CA, DZ, Mediobanca, RBI and UniCredit.


  • Volvo Treasury is pricing €500m (max) 1.5y at swaps +17bps and €500m (max) 4y at +62bps. Leads are Citi, ING, Mizuho and SocGen (B&D).

    • Related Topics

    Most Popular