UK DMO UPDATE: Syndication Announcement
The DMO "announces that the sixth transaction of the 2024-25 syndication programme will be a re-opening of 4 3/8% Treasury Gilt 2040" (ISIN: GB00BQC82D08).
- Transaction planned to take place w/c January 20 "subject to demand and market conditions".
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BUNDS: US Tnotes and Bund trade in line
A small Gap lower for the German 10yr Yield, but still short of Friday's low, since the Futures didn't quite managed to test 136.52 (Friday's high).
Once again Bund and Tnotes are trading in Tandem, a price action seen in the past three sessions now, the spread has moved within a -1bp/+1bp range and is flat going into the European session.
For the German 10yr Yield, reference 136.34:
- 2.05% = 136.83.
- 2.00% = 137.38.
For the US Tnotes (TYH5):
- 4.10% = 111.25.
STIR: 27bps of Easing Priced Into Thursday’s ECB Decision
Thursday's ECB decision headlines this week’s regional calendar. Consensus overwhelmingly looks for a 25bp cut (only one of the 63 analysts surveyed by BBG forecast a 50bp move), which is in line with market pricing. ECB-dated OIS price 27bps of easing into the meeting (i.e. just under a 10% implied probability of a 50bp cut).
- Beyond the rate decision, market focus will be on possible tweaks to the policy statement guidance and the results of the December projection round.
- MNI’s ECB preview will be out later this week.
- ECB-dated OIS price 151bps of easing through the end of next year, ~1bp more dovish vs Friday’s close.
- Euribor futures are +1.0 to +3.5 ticks through the blues, off highs with equities supported by the latest headlines from China’s Politburo meeting.
- The December Sentix survey headlines today’s light regional data calendar.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Dec-24 | 2.897 | -26.8 |
| Jan-25 | 2.581 | -58.4 |
| Mar-25 | 2.268 | -89.7 |
| Apr-25 | 2.037 | -112.8 |
| Jun-25 | 1.857 | -130.9 |
| Jul-25 | 1.769 | -139.6 |
| Sep-25 | 1.710 | -145.5 |
| Oct-25 | 1.684 | -148.1 |
| Dec-25 | 1.658 | -150.7 |
| Source: MNI/Bloomberg. | ||
CROSS ASSET: Politburo Provides Dovish Monetary Policy Tweak, First Change In Stance
The readout following the Chinese Politburo’s latest meeting on the economy provides the first tweak in the country’s monetary policy stance since ’11, as the body points to a “moderate loosening” in monetary policy.
- The Politburo also pointed to more proactive fiscal policy, extending the recent theme there.
- The body then went on to stress that it will strengthen counter-cyclical policy adjustments and boost consumption forcefully.
- Focus areas for the support measures are familiar at first glance, although the language is more forceful in some instances.
- Chinese equities higher following the headlines, while USD/CNH falls around 100 pips to ~7.2750.
- Broader G10 FX trade sees modest pressure on the USD via the rest-of-the-world growth channel, AUD now the outperformer on the day, while NZD pares some losses against G10 peers.
- Broader equity index futures edge higher.
