The UST steepening hit a new high for 5s30s while equities saw some new highs. Swap spreads lifted wider, and sources see FIG issuance on the wane
Today’s $15bn Jan31 TIPS auction was but a little molehill for bullish inflationistas who continued to chase BEs higher this session.
The 2x3 2y1y wedge traded in good size today and perhaps reflects growing interest to buy 2x3 CFS vol. 1y1y, 1x2 CFS also dealt. 10y20y sees buying.
Macro factors saw 10y yields rise, while in linkerland traders were distracted by syndication meetings. Swap liquidity is under scrutiny post-Brexit.
Euro inflation swaps were off session lows but remained softer across the board into the close following 10y supply from the AFT.
USTs are bear steepening as stocks make new all-time highs. $15bn 10y TIPS hit the auction block ahead. SocGen looks at LDI demand for USTs.
Recent structured note activity in USD.
With the ECB meeting stopping traffic and the SURE supply lurking, USD seized the opportunity to corner most of the cross-border market today.
The UST curve is steeper after the data and the ECB. Banks examine taper risk and timing. Another slug of USD callables prints.
The continued tightening in euro basis was front of mind for one trader today, despite low volatility in the market ahead of the ECB meeting.
A shorter list of euro deals ahead of the ECB today still includes a GS benchmark and a 30y from Land NRW.
Slightly disappointing domestic trade data has promoted slightly better receiving in long-dated JPY swaps, despite a rally in equities.
Listing of structured bonds and vanilla bonds issued in the Asia Pacific markets over the past week.
Swap flow has eased after the domestic jobs report was in line with expectations. There has been long-end flow. The 3s/10s box spread has edged wider.
GS' $5.5bn 3-part and MS' $7.5bn 3-part did not make an impression on swap spreads as spreads continued to foster a decent bid. SOFR/FF slips in.
BEs extended on the reflation rally of 2021 as the presidential baton was passed amid a buoyant risk-tone. Attention shifts to the 10y TIPS auction.
Little realized volatility has hit down gamma today. Despite more ZCs, vega is holding in, and is better bid. Deutsche likes 1x2 curve caps.
Recent structured note activity in USD and EUR.
Vols move lower, while some traders are intrigued by ongoing bids for 2y10y OTM receivers.
Speaking ahead of tomorrow’s new 10y OAT€i, inflation traders note more interest in swaps than bonds