HYBRIDS: Hybrids: Movers - Adecco

• As previously mentioned, mostly a two way early price action in Govies, Bund is back at its very tight session high, there's been some buying interest in French OAT, and the shorter end Schatz and Bobl, but very limited impact in Rates (Euribor) since the moves are more risks driven (tariffs, Equities) as oppose to interest Rate.
• The early volume still stands out in the US, but stays fairly subdued in Europe.

• The DMO will kick off issuance for the week this morning by launching the new 10-year 1.125% Sep-35 linker for GBP1.5bln.
• This will replace the 0.75% Nov-33 linker as the on-the-run 10-year issue.
• Auctions for that linker were strong with the lowest bid-to-cover in the five auctions so far this fiscal year at 2.89x (with a mean of 3.16x and 3.39x seen in the last auction in December).
• All of these auctions have been for GBP1.5bln nominal. We expect another strong linker auction. The 1.125% Sep-35 linker is due to be reopened on 25 February.
• Timing: Results will be available shortly after the bidding window closes at 10:00GMT with a further GBP375mln available to successful bidders via the PAOF.

ING note that “Dutch pension reforms are at risk due to a proposal in parliament that requires each fund to obtain a vote of approval from its participants before transitioning assets to the new system.”

• “This proposal could lead to a more gradual implementation of the reforms, delaying the unwinding of longer-dated fixed-rate receivers.”
• “Moreover, funds may become even more protective of their funding ratios until their transition date, potentially increasing the demand for fixed receivers in the near term”