TTF NATGAS TECHS: (H5) Corrective Pullback

Chancellor of the Exchequer Rachel Reeves has delivered a short statement in the House of Commons following her trip to China over the weekend. Says “Security and economic growth go hand in hand...If we do not engage with China we cannot raise our real concerns.” The main focus will be on the chancellor's response to questions on the state of public finances and the ongoing financial market jitters hitting UK assets. Shadow chancellor Mel Stride says on the spike in borrowing costs and falling the pound “This is a crisis made in Downing Street,”.

• Livestream can be found here.
• Reeves: "We have seen global economic uncertainty play out over the past week...I acknowledge the economic headwinds facing the UK."
• Reeves: "We remain committed to [the gov'ts] fiscal rules...we will meet them at all times". 

New 3-year:

• Spread set earlier at MS+17bps (guidance was MS + 19 bps area)
• HR 105% vs 2.20% Apr-28 Bobl
• Tranche size set earlier at E6bln (guidance was E5bln, MNI expected E5-7bln)
• Books closed in excess of E82bln (inc E5.75bln JLM interest)
• Maturity: 4 July 2028
• Short first coupon | 108 days accrued
• ISIN: EU000A4D5QM6

3.375% Oct-54 Tap:

• Spread set earlier at MS+127bps (guidance was MS + 130 bps area)
• HR 91% vs 2.50% Aug-54 Bund
• Tranche size set earlier at E5bln in line with guidance (MNI expected E4-6bln)
• Books closed in excess of E115bln (inc E5bln JLM interest)
• Highest book for a tranche since 2021
• ISIN: EU000A3K4EY2 (Immediately fungible)

For both:

• Settlement: 21 January 2025 (T+5)
• JLMs: Barclays, BNP Paribas, J.P. Morgan (B&D/DM), LBBW, NatWest Markets
• Timing: Hedge deadline 13:45GMT / 14:45CET. Pricing later today

• The first of President-elect Donald Trump’s Cabinet nominations will face Senate scrutiny today. Defense Secretary nominee Pete Hegseth will receive a grilling from Senate Armed Services Committee Democrats on misconduct allegations, and his lack of managerial experience, but is expected to pass Senate confirmation.  
• The House Ways and Means Committee will gavel in today for a hearing on the extension of Trump’s first-term tax cuts.
• President Biden defended his legacy in his final foreign policy speech of his presidency, arguing that he oversaw the rehabilitation of US multilateralism and enacted policies that will bolster the US’ global standing in the years to come.
• Trump’s team are discussing a gradual approach to tariffs, according to a Bloomberg report.
• A new Conference Board survey found that 71% of US CEOs are planning to modify their supply chains to offset the disruption of tariffs.
• Biden announced yesterday his administration will forgive the student loans of 150,000 more borrowers.
• Cutting edge 'made in America' chips from TSMC's Arizona plant could hit the market as soon as this quarter.
• Russian Foreign Minister Sergei Lavrov told reporters this morning that Russia will “study” Trump’s peace initiatives on Ukraine, “when he takes office."
• Israel and Hamas appear on the verge of a ceasefire-for-hostage deal that will lay the foundations for an armistice in Gaza.
• Chart of the Day: Americans offered a negative assessment of progress made under Biden's presidency. 

Full article: US Daily Brief