EUROZONE T-BILL ISSUANCE: W/C March 10, 2025
France, Spain, Belgium, Finland and Italy are due to sell bills next week. We expect issuance to be E23.1bln in first round operations, down from E26.7bln this week.
- On Monday afternoon, France will look to sell up to a combined E8.0bln of 13/14/28/50-week BTFs: E2.8-3.2bln of the 13-week Jun 12, 2025 BTF; E0.6-1.0bln of the 14-week Sep 24, 2025 BTF; E1.5-1.9bln of the new 28-week Sep 24, 2025 BTF; E1.5-1.9bln of the 50-week Feb 25, 2026 BTF.
- On Tuesday morning, Spain will come to the market to sell the 3-month Jun 6, 2025 letras and the 9-month Dec 5, 2025 letras. The size will be announced on Monday.
- Also on Tuesday, Belgium will issue a combined E2.4-2.8bln of TCs: An indicative E0.8bln of the 4-month Jul 10, 2025 TC and an indicative E1.8bln of the new 12-month Mar 12, 2026 TC.
- Finally on Tuesday, Finland will look to sell up to a combined E2bln of the 8-month Nov 13, 2025 RFTB and the new 11-month Feb 13, 2026 RFTB.
- To conclude issuance for the week on Wednesday, Italy will sell a new 12-month BOT, potentially alongside another BOT. Details will be announced later today.
For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.
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EURIBOR OPTIONS: Further ERZ5 Upside Flow
ERZ5 98.1875/98.4375/98.6875 call fly vs. 97.50/97.25 put spread, paper paid 1.5 on 7.5K, buying the call spread.
BOE: Sellside analyst views for the rest of the year
- All the sellside previews that we read look for a 25bp cut this week.
- After February, the majority of analysts (18/21) look for the next cut to be in May. Deutsche Bank expect a longer pause to August while both Morgan Stanley and TD Securities both look for a March cut (while noting heightened risks of a delay).
- In terms of 2025 outlook, over 60% of analysts (13/21) expect 100bp of cuts across the year to 3.75%. Only NatWest Markets (4.00%) looks for fewer cuts (despite this being the closest forecast to market pricing). Most remaining analysts (6/21) are equally split between 3.50% and 3.25% (i.e. considerably larger number of cuts than markets price).
- In terms of terminal rate, the majority of analysts 17/21 (81%) have their base case in a 3.00-3.75% range, almost evenly split. Other than NatWest Markets (4.00%) other outliers are to the downside. The mean terminal rate is 3.27%.
STIR: Market Nearly Evenly Split Between 3 Or 4 BoE Cuts In '25
BoE-dated OIS still hasn’t managed to price in greater than 50/50 odds of 4x 25bp cuts through year-end (on a binary 3 or 4 cut basis), with the bid in core global FI markets resulting in a fresh dovish cycle extreme of ~86.5bp of cuts being priced at one stage today.
- A reminder that the market priced ~36bp of cuts over the same horizon as recently as January 15.
- The market continues to price just under 24bp of easing for tomorrow’s decision and ~48bp of cuts through the May MPC.
- We look for cuts at both tomorrow’s decision and the May meeting.
- SONIA futures flat to +9.0.
- Dec highs in SFIZ5 remain unchallenged.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.467 | -23.7 |
Mar-25 | 4.414 | -29.1 |
May-25 | 4.227 | -47.8 |
Jun-25 | 4.140 | -56.4 |
Aug-25 | 4.009 | -69.5 |
Sep-25 | 3.969 | -73.5 |
Nov-25 | 3.893 | -81.1 |
Dec-25 | 3.865 | -83.9 |
