SPAIN AUCTION RESULTS: Bono/Obli auction
| 2.70% Jan-30 Bono | 0.85% Jul-37 Obli | 1.00% Oct-50 Obli | |
| ISIN | ES0000012O00 | ES0000012I24 | ES0000012G00 |
| Amount | E2.493bln | E2.146bln | E1.351bln |
| Previous | E1.311bln | E1.771bln | E1.502bln |
| Avg yield | 2.763% | 3.452% | 3.727% |
| Previous | 2.365% | 3.394% | 3.755% |
| Bid-to-cover | 1.52x | 1.48x | 1.74x |
| Previous | 2.04x | 1.38x | 1.72x |
| Avg Price | 99.704 | 73.899 | 55.318 |
| Low Price | 99.670 | 73.870 | 55.260 |
| Pre-auction mid | 99.642 | 73.756 | 55.094 |
| Prev avg price | 101.601 | 73.583 | 53.471 |
| Prev low price | 101.570 | 73.460 | 53.390 |
| Prev mid-price | 101.511 | 73.428 | 53.203 |
| Previous date | 05-Dec-24 | 18-Jul-24 | 20-Jul-23 |
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Historical bullets
EGBS: German 10s30s Steepens Post Funding Plan Announcement
As flagged in our initial reaction, the composition of the German 2025 funding plan has helped the German 10s30s curve steepen intraday. The curve is now 0.9bps steeper today (up 0.7bps since the announcement) at ~23.5bps, but still sits shy of this month’s steepest levels of over 26bps.
- Bobl’s cheapened on the 2s5s10s fly into the funding plan’s release, but has held close to intraday lows of ~17.5bps since 0900GMT.
- A reminder that the most notable part of the plan was that there are increases in Bobl and 30-year Bund issuance, while decreases in issuance are centred around Schatz and 10-year Bund.
STIR: Wage Data Pushes SONIA/Euribor Dec ’25 Spread Back Towards All-Time Highs
The hawkish GBP STIR move following this morning’s much firmer-than-expected UK wage data leaves the SONIA/Euribor Dec ’25 (Z5) spread less than 5bp off all-time closing highs.
- Spread last 219bp vs. all-time closing highs of 222.5bp.
- We flagged the risk of fresh widening in the spread in recent sessions/weeks, pointing to stickier inflation in the UK, heightened downside risks to European economic growth and the BoE’s current preference for a “gradual” approach to policy loosening as the background drivers.
- This morning’s wage data heightened the UK’s inflationary risks, presenting broad-based upside surprise and a will be a cause for concern at the BoE.
- Also note that a rally in the long end of the German curve (linked to the DFA’s funding plan, detailed in previous bullets) has had some influence in more recent trade.
Fig.1: SONIA/Euribor December ’25 (Z5) Spread
Source: MNI - Market News/Bloomberg
FOREX: FX OPTION EXPIRY - Some large Expiry in the EUR
FX OPTION EXPIRY: Watch the EUR on Friday.
Of note:
EURUSD 1.74bn at 1.0525.
EURUSD 1.02bn at 1.0500 (wed).
AUDUSD 1.01bn at 0.6350 (wed).
USDJPY 1.49bn at 155.00 (thu).
EURUSD 4.75bn at 1.0450, 7.24bn at 1.0500, 3.35bn at 1.0525 (fri).
EURGBP 2.6bn at 0.8290/0.8300 (fri).
USDCAD 3bn at 1.4200/1.4220 (fri).
AUDUSD 1.6bn at 0.6350 (fri).
USDCNY 2.83bn at 7.3000 (fri).
EURUSD 1.94bn at 1.0500 (mon).
- EURUSD: 1.0400 (955mln), 1.0425 (269mln), 1.0475 (858mln), 1.0525 (1.74bn).
- GBPUSD: 1.2640 (600mln).
- USDCAD: 1.4240 (520mln).
