SECURITY: Israel Delivers Response To Ceasefire Proposal Ahead Of Cairo Talks
Apr-11 16:09
Barack Ravid at Walla News reporting that Israel has delivered its response to an Egyptian mediation proposal on a Gaza hostage deal seen as crucial to opening negotiations to end the war between Israel and Hamas. Talks are set to get underway in Cairo, Egypt, tomorrow.
- According to Ravid, “the Israeli response approved by Prime Minister Netanyahu includes a willingness to be somewhat flexible regarding the number of hostages to be released.”
- Ravid cautions: “Egypt and the US are trying to formulate a mediation proposal that would be acceptable to both Israel and Hamas. Israeli officials said that there has been a rapprochement in positions between Israel and Egypt, but it is still unclear whether Hamas will agree to be flexible and accept a proposal that includes the release of more than five hostages alive.”
- MiddleEastEye noted earlier: "The Egyptian proposal calls for Hamas to release eight living captives and bodies of eight deceased captives in exchange for a truce lasting between 40 and 70 days, as well as Israel releasing a large number of Palestinians from prisons."
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EURIBOR: Mix Of Front-end Option Structures Highlights Uncertain ECB Rate Path
Mar-12 16:06
ERM5 has struggled to move back above 97.800 since last Wednesday’s German/EU fiscal-driven selloff in European rates. The contract is currently -2.5 ticks lower today at 97.765.
- Today’s options flow highlights that the path for near-term EUR rates remains uncertain. With the ECB now labelling policy as “meaningfully less restrictive” and the prospect of increased EU fiscal spending presenting a possible inflationary impulse, a slower pace of rate cuts in Q2 cannot be ruled out even if further US tariffs are imposed from April.
- These dynamics contrast to January this year, where tariff-related growth concerns were the primary focus and options activity was clearly skewed towards dovish plays.
- Today’s option volumes in ERM5 (including J5 and K5 options, reported by BBG) have been impressive, with over 700k traded and a call/put ratio of almost 4.00x.
- Underlying these volumes were a mix of structures: Some were targeting downside by April 11th (ERJ5 97.6875/97.62/97.5625 put fly buyer) and May 16th ( ERK5 97.50/97.4375 put spread buyer). Others looked for little change from current spot levels by June 16th (ERM5 97.6878/97.75/97.875 call fly buyer). Meanwhile, familiar dovish plays still remain of interest for those expecting a rally towards 98.000 (ERM5 97.87/98.00/98.12/98.25 call condor buyer and ERM5 97.9375/98.0625 call spread buyer).
- The ECB's next two decisions are April 17 and June 5.
GILTS: Cross-Market Cues Still Guiding Moves
Mar-12 15:52
Gilts following cues from Tsys/broader cross-market swings, with a recovery from session lows fading, leaving benchmark futures ~10 ticks off session lows.
- The bearish technical backdrop in the contract remains intact.
- Little in the way of domestic drivers evident since this morning’s gilt auction and DMO provisional issuance calendar for the initial weeks of FY25/26.
- Yields 3.5-5.5bp higher across the curve, flattening seen.
- 10s ~4.5bp wider vs. Bunds on the day, last ~182.5bp. This comes after the early tightening failed to test the support cluster at 175/174.5bp.
- BoE-dated OIS shows ~53bp of cuts through year end, ~5bp less dovish on the day.
- The next 25bp cut isn’t quite fully priced through June (~24.5bp of cuts showing over that horizon).
- SONIA futures flat to -7.0.
- Nothing of note on the UK calendar until Friday’s monthly economic activity data, with the BoE in its pre-meeting quiet period.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.457 | +0.2 |
May-25 | 4.266 | -18.9 |
Jun-25 | 4.211 | -24.4 |
Aug-25 | 4.073 | -38.2 |
Sep-25 | 4.035 | -42.0 |
Nov-25 | 3.944 | -51.0 |
Dec-25 | 3.923 | -53.1 |
FED: US TSY 17W BILL AUCTION: HIGH 4.175%(ALLOT 99.84%)
Mar-12 15:32
- US TSY 17W BILL AUCTION: HIGH 4.175%(ALLOT 99.84%)
- US TSY 17W BILL AUCTION: DEALERS TAKE 27.50% OF COMPETITIVES
- US TSY 17W BILL AUCTION: DIRECTS TAKE 3.28% OF COMPETITIVES
- US TSY 17W BILL AUCTION: INDIRECTS TAKE 69.22% OF COMPETITIVES
- US TSY 17W BILL AUCTION: BID/CVR 3.29
