ITALY AUCTION RESULTS: 3/7-year BTPs
Feb-13 10:16
| 2.70% Oct-27 BTP | 3.45% Jul-31 BTP | 3.15% Nov-31 BTP | |
| ISIN | IT0005622128 | IT0005595803 | IT0005619546 |
| Amount | E3.25bln | E1.25bln | E1.25bln |
| Previous | E2.75bln | E3.5bln | E3bln |
| Avg yield | 2.52% | 3.13% | 3.18% |
| Previous | 2.85% | 3.19% | 3.49% |
| Bid-to-cover | 1.58x | 1.85x | 1.83x |
| Previous | 1.65x | 1.61x | 1.63x |
| Avg Price | 100.50 | 101.98 | 99.98 |
| Pre-auction mid | 100.476 | 101.942 | 99.921 |
| Prev avg price | 99.670 | 101.740 | 98.10 |
| Prev mid-price | 99.641 | 101.707 | 98.016 |
| Previous date | 13-Jan-25 | 11-Oct-24 | 13-Jan-25 |
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US INFLATION: MNI US CPI Preview: Still Too High For Comfort
Jan-14 10:15
Our preview of Wednesday's December CPI release has been published (PDF):
- Consensus sees core CPI inflation decelerating slightly to between 0.2 to 0.3% M/M in December, with MNI’s analyst review pointing to an average estimate of 0.24% so a bias toward a 0.2% rounded figure.
- Likely to be the single most closely watched individual aspect of Wednesday’s CPI report, rental inflation is expected to accelerate to an average figure that firmly rounds to 0.3% M/M in December.
- Supercore inflation is seen pulling back, though, to the upper 0.20s%, from 0.34% in November.
- If housing is our top pick to watch this month then core goods inflation – which is seen pulling back in December - is closely second, amid tariffs speculation.
- Initial estimates point to core PCE inflation at ~0.20% M/M, softer in outright terms but on a relative basis an acceleration from the softer 0.115% in Nov. That outlook will hinge partly on PPI data out Tuesday.
- It is clear that the Fed will hold in January, with the first plausibly “live” meeting not until March. But with pricing having shifted so quickly away from 2025 cuts, it’s a good juncture to assess whether markets have gotten too hawkish.
- Even in-line inflation readings could bolster the FOMC leadership’s confidence that they are on track to get PCE to 2%, and leave the door open to two rate cuts later this year, though this report is not widely expected to provide the requisite evidence.
EQUITIES: EU Bank rolling Option call
Jan-14 10:11
- SX7E (17th Jan) vs (21st Feb) 149c, bought the feb for 2.7 in 20k.
Suggest rolling call, there's 22.1k OI in the Jan.
GILT AUCTION RESULTS: Decent 30y linker auction
Jan-14 10:09
Decent 30y linker auction with the average price of 80.714 higher than at any time during the auction window. This has led to the price moving higher post-results (albeit now a little below the striking price of the auction).
- The bid-to-cover of 3.06x was marginally lower than some other 14+ gilt auctions recently - but to still be in excess of 3x shows no real concerns in the market here.
- 10-year nominal yields moved down marginally on the release of the results (but largely retraced that move now).
- No reaction in the 10-year or shorter part of the curve, nor in gilt futures.
