US: Stephen Miran Senate Nomination Hearing Underway

Gilts bid alongside Tsys in recent trade, although futures are unable to break above this morning’s highs on the initial test and fade from recovery highs.

• Contract last -12 at 92.30 vs. highs of 92.40.
• Initial support and resistance levels remain untouched (91.10/92.68), leaving the short-term bullish cycle within the longer run bearish trend intact.
• Yields little changed across the curve.
• Spread to Bunds 2bp tighter at 203.3bp, spread on track for the lowest close since October, with 200bp presenting the next downside target of note if we close here.
• BoE-dated OIS little changed on the day, showing ~71bp of cuts through year-end.
• SONIA futures -0.5 to +1.5.
• Looking ahead, tomorrow will see the DMO come to market with GBP3bln of the 0.875% Jul-33 green gilt.
• Seemingly still no set time for Chancellor Reeves' Wednesday address, with The Telegraph reporting a window for the address during "Wednesday morning."
• Our political risk team notes that the most eye-catching headlines from Reeves' speech could centre on the governments support for the expansion of three major London-adjacent airports: Heathrow, Gatwick and Luton.  This wouldn’t be market moving.

• Treasury futures remain in negative territory following lower than expected Conference Board Consumer Confidence data.
• Futures had pared losses/climbed to session highs on mini-version of Monday's DeepSeek-tied risk-off move as Nvidia trades weaker again this morning. Reversal soon followed, however:
• Currently, the Mar'25 10Y contract trades -7.5 at 108-29.5, off late overnight low of 108-25.5. Futures remain inside technical ranges: support well below at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger), nearly breached yesterday - resistance above at 109-12+ (50-day EMA).
• Cross-asset moves: Bloomberg US$ index still bid but off highs at 1300.58 (+3.74), Gold +11.45 at 2752.26, stocks firmer (SPX Eminis +9.0 at 6055.75.

New 10-year Feb-35 RAGB

• Reoffer price 99.596 to yield 2.997%.
• Spread set earlier at MS+48bps (guidance was MS+51bps area)
• Size: E5bln inc E250mln retained (MNI expected E4.5-5.0bln including E250-500mln retention)
• Books closed in excess of E35bln (inc E3.15bln JLM interest)
• HR 98% vs 2.50% Feb-35 Bund
• Maturity: 20 February 2035
• Coupon: 2.950% Long first
• ISIN: AT0000A3HU25 

1.85% May-49 Green RAGB tap

• Reoffer price 77.575 to yield 3.19%
• Spread set at MS+78bps (guidance was MS+80bps area)
• Size: E1.5bln inc E250mln retained (MNI expects E1.0-2.0bln)
• Books closed in excess of E15bln (inc E800mln JLM interest)
• HR 100% vs 1.25% Aug-48 Bund
• ISIN: AT0000A2Y8G4

For both:

• JLMs: BofA Securities, Deutsche Bank, Erste Group, J.P. Morgan, Morgan Stanley and Raiffeisen Bank International
• Timing: Hedge deadline 14:10GMT / 15:10CET

From market source / Bloomberg