US Dollar (USD)
USD MTN activity saw a slowdown in zero-coupon callables as only $411m in total sold, with the majority in 30y maturity and non-Formosa.
Bases are tighter led by cross currency as the Fed announces a new central bank repo facility. New issues gush. Brevan is up again.
It has been tortuous session for TIPS breakevens as the Fed buybacks have teetered the markets back into profound uncertainty.
Implieds are mostly lower. Long expiry high strikes trade. 6m expiries out begin to see discounting specified - EFFR or SOFR.
Swap spreads have lifted as abundant paying boosting the 10y spread to +1bps intraday. JPM and others view CPFF start will signal LIBOR's trend lower
$109bn priced in IG new issuance last week, a record for a week, sending March to a whopping $210bn. Sources see more flows ahead but slowing.
The 10y sector outperformed during a mildly risk-off start to the week. Deutsche and Citi both eye FRA-OIS.
BEs spiraled sharply lower immediately after the Fed’s underwhelming TIPS buyback for the second straight session, ending an impressive run this week.
USTs are bull flattening further as equities sink. Swap spreads are wider with rate lock paying cited ahead of more IG issuance.
The standout move amid another bullish session for fixed income was once again the unstoppable rise of 3m LIBOR. Or is it?