BOC: Data Dependence In Focus Amid Trade Uncertainty (2/2)

• Size: E13bln (another large syndication after MNI expected)
• Spread set: 4.15% Oct-39 BTP +7bps (guidance was +9bps area)
• Books in excess of E133bln (inc JLM interest)
• Maturity: 1 October 2040
• ISIN: IT0005635583
• Settlement: 18 February, 2025 (T+5)
• Bookrunners: Barclays, Deutsche Bank, Intesa Sanpaolo, Morgan Stanley and Nomura
• Timing: Books open, pricing later today

From market source / Bloomberg

• Fed Funds implied rates have been little changed by Trump’s overnight upping of steel and aluminum tariffs to 25% from the previously touted 10%.
• Cumulative cuts from 4.33% effective: 1.5bp Mar, 7bp May, 15.5bp Jun, 21bp Jul and 37.5bp Dec.
• Today’s Fedspeak is firmly headlined by Fed Chair Powell at 1000ET where he’s expected to reiterate that there’s no rush to cut rates. See our previous preview bullet here  and some analyst expectations on it here.
• As for other speakers, Hammack is watched for a hawkish take after her surprise dissent to the December cut and then saying Jan 17 that the Fed can be very patient on further cuts with mon pol “only moderately restrictive”. Williams meanwhile last spoke Jan 15, saying the Fed can take its time analyzing incoming data with the US economy once again proving resilient whilst the disinflation process remains “in train”. He saw signs of stabilization in the labor market, a view that was likely bolstered after last Friday’s payrolls report.
  • 0850ET – Hammack (non-voter) on economic outlook (text + Q&A)
  • 1000ET – Powell (voter) testimony to Senate Banking Committee (text + Q&A - no official confirmation but expecting text release at 1000ET)
  • 1530ET – Williams (voter) keynote remarks (text + Q&A)
  • 1530ET – Bowman (voter) on bank regulation (just text)

• ERK5 97.68/62/56/43 broken p condor bought for half in 3k.
• ERU5 97.87/98.00/98.12/98.25c condor, sold at 3.5 in 3k.