Total Derivatives

Euro (EUR)

BEs adopted a newfound attitude after the Fed ruined the day yesterday, lending solid support to today’s $14bn 10y TIPS reopening.

A slightly twitchy Bund market last saw its benchmark yield skipping 3.4bps higher after the FOMC and BOE, amid a dearth of domestic drivers.

After a heavy day of issuance on Wednesday, sellers of euro bonds took a breather today, with honourable exceptions from a global spread of names.

The Fed/Powell’s more decisive taper talk at today’s FOMC decision scared BEs lower amid better RY selling. 10y TIPS auction now eyed.

Swappers discuss the widening in EONIA-BOR and 3s6s as some banks see more to come. Heavy new issuance in euros weighs on long-dated asset swaps.

The euro new deal pipeline continues to bulge with deals from across the spectrum of issuers.

Risk sentiment stabilized after yesterday’s scare but BEs were sticky today, reluctant to join the modest risk-on move despite the Fed’s help.

Summing up this historic day in his market, one seasoned basis swapper said the transition to RFRs will make regulators happy. If that is possible.

EUR volsters said that their market was not a big mover today, but was pricing in additional risks at the margins. New issues include a CMS deal.

Asset swap spreads proved resistant to a rush of new euro deals today while the Bund also shrugged off a recovery in risky assets.

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