EGBS: Citi Recommend Short 10-Year OATs Vs. Bunds & BTPs On Fly
Feb-07 08:38
Citi recommend selling 10-Year OATs on a fly against Bunds & BTPs.
- They note that “survival of the Bayrou government, strong reception of supply and domestic real money demand on high outright yields” has supported OATs in recent weeks.
- OATs now look rich on their value model, which, when coupled with the slowing of OAT tightening and medium-term economic, fiscal, political and ratings risks, leads to the short OAT on the fly recommendation.
- They also suggest that “in terms of demand from domestic real money, the 40bp reduction in 10-Year OAT yields since mid-January might prompt that cohort to wait for better entry levels.”
- On the BTP leg, they note that “despite an optically tight spread to Bunds, BTPs have underperformed vs other correlated assets and currently look the cheapest among EGBs on our fair value model…Overall, the bottom line for supply remains that declining pressure after January front-loading should be supportive for the periphery.”
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EGB SYNDICATION: Guidance on the Italian Benchmark
Jan-08 08:35
EUR Benchmark 10Y Fixed (Aug. 1, 2035) BTPS+9 Area
- Coupon: Semi-annual, act/act, short first
- UOP: General purposes
- See security information: 10Y Fixed
EU5b WNG 20Y Green Fixed (April 30, 2046) BTPS+8 Area
- Coupon: Semi-annual, act/act, short first
- Format: Green bond
- UOP: In accordance with Italy’s Framework for the Issuance of Sovereign Green Bonds
- See security information: 20Y Fixed
- Issuer: Italy Buoni Poliennali Del Tesoro (BTPS)
- Ratings: Baa3/BBB/BBB
- Format: Reg S, dematerialized, senior unsecured, 144a eligible, CAC
- Settlement: Jan. 15, 2025
- Denoms: 1k x 1k
- Bookrunners: SIENA, BNPP (B&D), Citi, CA-CIB, NatWest Markets, UniCredit
(As per Bloomberg).
EGB SYNDICATION: Italy 10-year BTP / 20-year Green BTP: Guidance
Jan-08 08:32
New 10-year BTP:
- Tranche size: EUR Benchmark (MNI expects E10bln)
- Guidance: 3.85% Feb-35 BTP +9Bps Area
- Maturity: 1 August 2035
- Coupon: Semi-annual, act/act, short first
New 20-year Green BTP:
- Tranche size: E5bln (WNG)
- Guidance: 4.45% Sep-43 BTP +8bps Area
- Maturity: 30 April 2046
- Coupon: Semi-annual, act/act, short first
For both:
- Settlement: 15 January, 2025 (T+5)
- Bookrunners: SIENA, BNPP (B&D), Citi, CA-CIB, NatWest Markets, UniCredit
- Timing: May price today
Details as per Bloomberg
US TSY FUTURES: US Yields tick higher, Dollar finds a Bid
Jan-08 08:27
- US Treasuries are seeing a pick up in volumes to the sell side, getting dragged lower by Europe.
- The Dollar is finding a broader bid on the follow, with US Yield elevatged overall, EUR, GBP fell to their respective lows against the Greenback.
- Main focus target in the 10yr Yield is at 4.7351%, the 2024 high, while in G10 FX, the Dollar has pared some of its overnight losse to edge in the green against most G10.
