Despite a modest risk-on move, the belly of the UST curve is pushing higher. More record-setting IG issuance floods in. SocGen analyzes the curve.
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.
With everyone from sovereigns to corporates scrambling to raise debt, flows are having a big impact on the swap market.
It might not be the most important stat related to the virus's world tour. But the 3m EUR/USD basis is at an all-time high. Not for long, say traders.
The supply onslaught continues as corporates scramble to raise debt
Strong demand for USD via BOJ swap lines has put pressure on the domestic repo market. The BOJ purchase plan for April is due out this afternoon.
There has been trade in AUD curve spreads and the box is at a 2-week wide. The issuance outlook is expected to weigh on the ultra long sector.
In a surprise move on Monday the PBOC cut its 7-day reverse repo rate by 20bps and injected CNY50bn in liquidity into the money market.
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
Recent structured note activity in USD and EUR.
GBP swappers fell back on old memories of painful times to negotiate a potentially tricky Monday. They noted 30s/40s ASW action and eyed DMO supply.
Dealers confirmed that the long end of the euro inflation curve had held up today even as Brent's $3 plunge weighed on the front end.
Some traders remain wary about selling top right gamma. New deals include a CMS1010. Citi looks at EUR vs USD vega.
$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 overriding theme in euros has seen clients as better payers in recent sessions. Some argue RV is dead.
The 10y sector outperformed during a mildly risk-off start to the week. Deutsche and Citi both eye FRA-OIS.
Corporates AB InBev, Thermo Fisher and VW are working on deals alongside Canada's CPPIB.