GILTS: Under Light Pressure As Cross-Market Cues Dominate

Mar-13 09:29

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Cross-market cues continue to dominate given the lack of meaningful local developments. * Core glob...

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NORWAY: Offsetting Productivity and Compensation Impacts From Q4 GDP Report

Feb-11 09:28

The Q4 GDP print had mixed implications for the March MPR rate path from an income/productivity perspective. Although mainland real productivity per hour growth was -0.5% Q/Q (vs 0.5% prior), annual wage growth was below Norges Bank’s December MPR projection at 5.0% Y/Y (vs 5.2% forecast, 5.7% prior). 

  • Whole-economy employment growth was 0.2% Q/Q (in line with the Q4 Regional Network Survey) and 0.6% Y/Y (in line with the December MPR projection). Meanwhile, hours worked grew 0.1% Q/Q on a whole-economy and mainland basis.
  • These productivity, compensation and hours worked dynamics have offsetting impacts on overall unit labour cost growth.
  • The weak productivity reading takes some of the shine off last quarter’s upward productivity revisions going back to 2022, but we don’t want to overstate its impact. We noted earlier that headline GDP weakness (-0.6% Q/Q) was largely due to a pullback in inventory investment, and a good deal of that would’ve bled into the mainland GDP reading too (and thus weigh on productivity growth).
  • Taken alongside the GDP expenditure breakdown covered earlier, with think the Q4 GDP report should still be a dovish factor in the March MPR rate path. Governor Wolden Bache will likely reaffirm guidance for a 25bp March cut at her annual address on Thursday.

 

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CROSS ASSET: New session lows for Bond Futures

Feb-11 09:27
  • New lows for the Bund, and German Govie futures lead the way to the downside, Supply Delta hedging needs has been weighing since the Cash open.
  • Tariffs announcement has also played its part, although the move in the US Treasuries lags, with the 109.01 level still holding in TYH5, this was the Post NFP printed low.
  • As noted on the Bund open, 132.95 is the first downside hurdle, the NFP printed low, but better support is seen at 132.72.
  • The move in Yields could keep the USDJPY underpinned.

EU-BOND SYNDICATION: 2.50% Dec-31 EU-bond / 3.25% Feb-50 Green: Final terms

Feb-11 09:23

2.50% Dec-31 EU-bond

  • Spread set at MS+37bps (guidance was: MS + 39bps area)
  • Size: E6bln WNG (MNI expected E4-6bln)
  • Books in excess of E75bln (inc E4.5bln JLM interest)
  • ISIN: EU000A3L1DJ0

3.25% Feb-50 Green EU-bond

  • Spread set at MS+108bps (guidance was: MS+110bps area
  • Size: E5bln WNG (MNI expected E4-6bln)
  • Books in excess of E80bln (inc E5.5bln JLM interest)
  • ISIN: EU000A3K4EU0

For both

  • Settlement: 18 February 2025 (T+5)
  • JLMs: Citi / DB / HSBC / Morgan Stanley (B&D/DM) / Societe Generale
  • Timing: Books to close at 10:00GMT / 11:00CET, pricing later today