RANsquawk DAILY G7 BOND AUCTION PREVIEW – 09/05/12
AUCTION PREVIEW: ECB's 7-day USD Operation
Today the ECB is conducting its 7-day USD operation. In the last 7-day USD operation, which took place on the 2nd May 2012, the ECB allotted an amount of USD 532.2mln with 4 total bidders.
Results are expected at 1000 BST.
AUCTION PREVIEW: GE EUR 5bln 0.5% Apr'17 Bobl Auction
Today the Bundesbank is conducting its 0.5% 07-Apr-17 Bobl auction, where it expects to raise an amount of approximately EUR 5bln. In terms of historical data:
The 0.5% Apr'17 is a new line being auctioned for the first time today. As there is no historical data for this line it can be compared to the 0.75% Feb'17 Bobl, which was last auctioned Apr'12 with a bid/cover ratio of 1.80 (yield 0.800%, retention 15.83%). The last three auctions on this line have seen an average bid/cover ratio of 1.80 (average yield 0.833%, average retention 16.90%)
The bidding deadline is at 1030 BST, with results due shortly after.
AUCTION PREVIEW: UK GBP 2bln 4.5% Dec'42 Gilt Auction
Today the UK DMO is conducting its 4.5% Dec'42 conventional Gilt auction, where it expects to raise approximately GBP 2bln. In terms of historical data:
The 4.5% Dec'42 was last auctioned in Mar'12 with a bid/cover ratio of 1.71 (yield 3.431%, yield tail 0.2BPS). Prior to this, this Gilt has not been tapped by the DMO since Jul'08 therefore using a historical average would not provide an accurate guide.
Today's auction from the UK DMO comes just a day before the BoE MPC rate and asset purchase facility target announcements, where the markets await any indication of further asset purchases after the completion of the current program. Median expectations for the BoE AFP is for unchanged at GBP 325bln at this stage, although a few analysts expect a hike of either GBP 25bln or GBP 50bln, but this remains an outside bet. Although this may dampen appetite in today's auction, it is worth noting on the flip side that the curve has steepened in recent times, so the 10s/30s curve now sits at its steepest level since September of last year.
Bids are submitted by 1030 BST, and results are expected between 1035-1045 BST.
AUCTION PREVIEW: US Fed's Outright TIPS Purchase Jul'18 – Feb'42
Today the NY Fed is conducting its Outright TIPS Purchase in the maturity range Jul 2018 – Feb 2042. This is the seventh 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 31.87bln in the remaining 11 operations and sell USD 33.02bln in the remaining 4 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 1.00bln – USD 1.50bln. The last Outright TIPS purchase operation in the maturity range of 7 – 30 years was on the 3rd April 2012, with a purchase size of USD 1.34bln and a submitted/accepted ratio of 1.88. It is worth noting that effective from September 30, 2011, the Fed plans to buy 3% 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: www.ecb.int, www.deutsche-finanzagentur.de/, 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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