ZAR: Rand Steadies After Taking Hit From Untabled Budget

The German ZEW expectations index fell to 10.3 in January, compared to a consensus estimate of 15.1, and December's 15.7, indicating a broad stalling at a relatively low level. The current situation index meanwhile ticked up a bit, to -90.4, outperforming consensus of -93.1 but remains bleak.

• A wider update to German sentiment will follow later this week with the January flash PMIs, and Monday's IFO Business Climate.
• The ZEW index is based on a survey of "experts from banks, insurance companies and financial departments of selected corporations [which] have been interviewed about their assessments and forecasts for important international financial market data" - so the index can exhibit elevated levels of correlation with German stock indices as the DAX.

EURIBOR FIX - EMMI/Bloomberg

• EUR001W 2.9090 -0.0120
• EUR001M 2.7740 -0.0110
• EUR003M 2.6810 0.0040
• EUR006M 2.6060 -0.0130
• EUR012M 2.4890 0.0060

Latest block trades lodged at 09:39:07 London/04:39:07 NY:

• TUH5 5,597 lots blocked at 102-24+.
• TYH5 2,592 lots blocked at 108-25+.
• Would guess a curve flattener given the TY leg traded further through the offer than the TU leg and the 2s7s spread has flattened ~1bp over the last 30 minutes.
• 2s7s now ~12bp off the early '25 closing high, last 21.6bp.
• Looks slightly mis-weighted compared to the CMEs recommended 2:1 ratio, with a bias towards the TU leg.

Fig. 1: US. 2-/7-Year Tsy Yield Curve (bp)

Source: MNI - Market News/Bloomberg