RANsquawk PREVIEW: ECB May Rate Decision due at 1245BST/0645CDT and Press Conference due at 1330BST/0730CDT
AUCTION PREVIEW: SP EUR 1.5-2.5bln combined 4.0% Jul'15, 3.8% Jan'17 & 5.5% Jul'17 Bond Auctions
Today the Spanish Treasury is conducting its combined 4.0% 30-Jul-15, 3.8% 31-Jan-17 & 5.5% 30-Jul-17 bond auctions, where it expects to raise an amount in the range of EUR 1.5-2.5bln. In terms of historical data:
- The 4.0% Jul'15 line was last auctioned in Mar'12 with a bid cover ratio of 2.37 (yield 2.617%). The last three auctions on this line have seen an average bid/cover ratio of 2.06 (average yield 2.937%).
- The 3.8% Jan'17 line was last auctioned in Feb'12 with a bid cover ratio of 2.70 (yield 3.565%). The last three auctions on this line have seen an average bid/cover ratio of 2.40 (average yield 4.630%).
- The 5.5% Jul'17 line has not been tapped since Feb'05; therefore the use of historical data would not provide an accurate guide.
Spain comes back to the market again today looking to raise a somewhat reduced amount of EUR 1.5-2.5bln, lower than the range of EUR 2.5-3.5bln used for previous auctions in the same maturity range. Last time Spain came to the market looking to sell bonds, which was two weeks ago, they sold towards the top end of their indicative range, and results showed fairly solid demand. However, today is the first time Spain looks to raise funds following their 2-notch sovereign downgrade by S&P; although price concession has been built in since then, plus is it worth noting that Spain is well ahead of their issuance plans for this year.
Results are expected between 0930-0945 BST.
AUCTION PREVIEW: FR EUR 6.5-7.5bln combined 4.25% Oct'17, 3.25% Oct'21, 3.00% Apr'22 & 6.00% Oct'25 OAT Auctions
Today the French Debt Agency is conducting its combined 4.25% Oct'17, 3.25% Oct'21, 3.00% Apr'22 & 6.00% Oct'25 OAT auctions where it expects to raise an amount in the range of between EUR 6.5-7.5bln. In terms of historical data:
- The 4.25% Oct'17 OAT line was last auctioned in Apr'12 with a bid/cover ratio of 3.27 (yield 1.960%). The last three auctions on this line have seen an average bid/cover ratio of 3.93 (average yield 2.097%).
- The 3.25% Oct'21 OAT line was last auctioned in Jan'12 with a bid/cover ratio of 1.64 (yield 3.290%). The last three auctions on this line have seen an average bid/cover ratio of 2.31 (average yield 3.23%).
- The 3.00% Apr'22 OAT line was last auctioned in Apr'12 with a bid/cover ratio of 2.56 (yield 2.980%). The last three auctions on this line have seen an average bid/cover ratio of 2.15 (average yield 3.007%).
- The 6.00% Oct'25 OAT line has not been auctioned since Dec'10, therefore is not comparable.
Results are expected between 0950-1000 BST.
AUCTION PREVIEW: UK GBP 1.2bln 0.75% Mar'34 Index Linked Gilt Auction
Today the UK DMO is conducting its GBP 1.2bln 0.75% March 2034 Index Linked Gilt Auction.
- The 0.75% 2034 I/L Gilt was last auctioned in Mar'12 with a bid/cover ratio of 1.93 (yield 0.044%). This has been the only formal auction on this line, however this Gilt was syndicated twice in 2011, firstly in May'11 with a syndicated yield of 0.793% and lastly in Jul'11 with a syndicated yield of 0.640%.
Bids are submitted by 1030 BST, and results are expected between 1035-1045 BST.
AUCTION PREVIEW: US Fed's Outright Treasury Coupon Purchase Feb'36 – Feb'42
Today the NY Fed is conducting its Outright Treasury Coupon Purchase in the maturity range Feb 2036 – Feb 2042. This is the third operation of this series as part of the Fed's new maturity extension program, and until May 31st 2012, the Fed expects to buy approximately USD 40.27bln in the remaining 14 operations and sell USD 41.66bln in the remaining 5 operations. It is worth noting that the Fed originally planned to buy about USD 45bln in 15 operations and sell about USD 43bln in 6 operations.
In today's operation, the Fed expects to buy in the range of USD 1.50bln – USD 2.00bln. The last Outright Treasury Coupon purchase operation in the maturity range of 25 – 30 years was on the 30th April 2012, with a purchase size of USD 1.83bln and a submitted/accepted ratio of 2.71. It is worth noting that effective from September 30, 2011, the Fed plans to buy 32% of its coupon securities in this maturity range.
This Operation is tentatively scheduled to begin around 1515 BST (1015 EDT) and close at 1600 BST (1100 EDT). Results are released shortly after 1600 BST (1100 EDT).
Sources: http://www.tesoro.es/en, http://www.aft.gouv.fr, www.dmo.gov.uk, http://www.newyorkfed.org/markets/tot_operation_schedule.html
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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