EQUITIES: Sell-Off in E-Mini S&P This Week Reinforces Short-Term Downtrend
The trend in the Eurostoxx 50 futures contract remains bullish with price trading closer to its rece...
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EGBS: OATs Continue To Benefit From Reduction In Short-Term French Risks
The reduction in short-term French political risk premium continues to filter into the 10-Year SPGB/OAT/PGB fly after the French Socialist Party indicated that it would not support a censure motion against PM Bayrou (vote scheduled for later today).
- The structure is testing the November 21 closing level at -37.1bp, ~19bp off cycle/’25 closing lows.
- While the short-term risks have clearly lessened on that development, medium-term fiscal and political headwinds remain intact, with difficult discussions surrounding pensions and further fiscal tightening needing to be addressed on the coming months.
- As such, Commerzbank continue to suggest that “an ongoing OAT recovery should be used to add to structural shorts in the semi-core complex vs. Iberia.”
Fig. 1: 10-Year SPGB/OAT/PGB Fly (bp)
Source: MNI - Market News/Bloomberg
STIR: SFRH6/U6/H7 Fly Lifted
SFRH6/U6/H7 fly paper paid -3.5 on ~4.1K. ~6.4K lots traded at that price in total on the session.
FOREX: FX OPTION EXPIRY
Of note:
USDJPY 2.07bn at 153.15/153.25.
USDCAD ~1bn at 1.4240.
EURUSD 5.37bn at 1.0400/1.0450 (thu).
GBPUSD 1.01bn at 1.2550 (thu).
USDCAD 1.01bn at 1.4310 (fri).
EURUSD 3.5bn at 1.0450/1.0455 (mon).
EURUSD 2.04bn at 1.0450 (tue).
- EURUSD: 1.0375 (230mln), 1.0400 (720mln), 1.0430 (473mln), 1.0475 (326mln), 1.0500 (1.35bn).
- USDJPY: 153.15 (965mln), 153.25 (1.11bn).
- USDCAD: 1.4240 (954mln).
- AUDUSD: 0.6260 (364mln).
- NZDUSD: 0.5700 (379mln).
