AUTOMOTIVE: Nissan (NSANY Ba1[N]/BB[N]/BB+[N]): Hon Hai
* Hon Hai reported results this morning. * In the slide deck, Hon Hai indicates it will sign a CDMS ...
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GERMAN AUCTION RESULTS: 0% Aug-50 Bund / 2.50% Aug-54 Bund
| 0% Aug-50 Bund | 2.50% Aug-54 Bund | |
| ISIN | DE0001102481 | DE000BU2D004 |
| Total sold | E1bln | E1.5bln |
| Allotted | E795mln | E1.189bln |
| Previous | E0.822bln | E1.190bln |
| Avg yield | 2.65% | 2.70% |
| Previous | 2.46% | 2.84% |
| Bid-to-offer | 3.11x | 1.95x |
| Previous | 1.84x | 2.19x |
| Bid-to-cover | 3.91x | 2.46x |
| Previous | 2.24x | 2.76x |
| Avg price | 51.27 | 95.87 |
| Low price | 51.24 | 95.84 |
| Pre-auction mid | 51.174 | 95.761 |
| Prev avg price | 53.39 | 93.16 |
| Prev low price | 53.38 | 93.15 |
| Prev mid-price | 53.297 | 93.092 |
| Previous date | 16-Oct-24 | 15-Jan-25 |
GILTS: Bullish Momentum Stalling
Supply-related pressure across wider core global FI markets and spillover from a rally in European equities weighed on gilts at the open, with fresh selling seen in recent trade.
- A downtick in oil has limited the weakness.
- Futures as low as 92.80.
- First support at the 20-day EMA (91.63), with the short-term bullish cycle still intact but losing some momentum.
- Yields 1.5-2.5bp higher across the curve.
- 10-Year spread to Bunds little changed at ~207.5bp.
- Local headline flow has been dominated by NIESR’s higher-for-longer view surrounding the BoE (looking for one cut in both ’25 and ’26, leaving Bank rate at 4.00%) and suggestions surrounding the erosion of the UK’s narrow fiscal headroom (not a new idea)
- GBP1bln of 0.625% 0.625 Mar-45 I/L supply was digested smoothly.
- Modest hawkish adjustments in GBP STIRs seen given the moves in the long end.
- 58.5bp of BoE cuts priced through year-end vs. 60bp early today.
- SONIA futures flat to -2.0.
- Comments from BoE MPC member Greene due this afternoon (15:00 GMT).
- Spill over from U.S. CPI data also eyed.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.407 | -4.7 |
May-25 | 4.211 | -24.3 |
Jun-25 | 4.134 | -32.0 |
Aug-25 | 3.989 | -46.5 |
Sep-25 | 3.953 | -50.1 |
Nov-25 | 3.883 | -57.2 |
Dec-25 | 3.869 | -58.5 |
ITALY DATA: Italy IP Surprisingly Slides But Data Volatility Caveat
Italian December industrial production was weaker than expected falling 3.1% M/M swda (vs -0.2% consensus), after rising 0.3% in November. On a 3m/3m basis, industrial production deteriorated further to -1.1% from -0.7% in November.
- On the month, there were heavy declines across the main categories (consumer goods -3.3%, intermediate goods -3.6% and capital goods -3.3%) whilst energy bounced 1.0% - all on a SWDA basis.
- A reminder though that the underlying data are prone to particularly large swings, which display a heavy seasonal pattern but the magnitude of which can make adjustment difficult: actual NSA production fell -17% M/M compared to the -20% M/M in Dec 2023 whilst the working day adjusted only data saw -19% M/M after -14% M/M in Dec 2023.
- Industrial sentiment in Italy remains weak, with the manufacturing PMI in contractionary territory for 10 consecutive months (46.3 in January). The ISTAT manufacturing confidence series continues to remain below its 2000-2019 average at 86.8 in January (vs 91.0 average).
- 3m/3m production in consumer goods remains positive in December, whilst energy has returned to growth from a slight decline in November. Conversely, 3m/3m intermediate and capital goods production were negative and deteriorated further in December.
- Looking at manufacture of motor vehicles, trailers and semi-trailers specifically fell 3.5% M/M, after rising 0.7% in November. The 3m/3m series has been negative since December 2023, and deteriorated further in December to -12.5% from -11.9% in November.
