RANsquawk DAILY G7 BOND AUCTION PREVIEW – 30/05/12
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 23rd May 2012, the ECB allotted an amount of USD 300mln with 1 total bidder.
Results are expected at 1000 BST.
AUCTION PREVIEW: IT EUR 4.50-6.25bln combined 4.75% Jun'17 & 5.50% Sept'22 BTP Auctions
Today the Italian Treasury is conducting its 4.75% 01-June-17 and 5.50% 01-Sept-22 BTP auctions, where it expects to raise an amount of between approximately EUR 4.50-6.25bln.
- The 4.75% Jun'17 BTP is a new line being auctioned for the first time today. For comparison purposes we can use the 4.75% May'17 5-year BTP, which was last auctioned in Apr'12 with a bid/cover ratio of 1.34 (yield 4.860%). The last three auctions on this line saw an average bid/cover ratio of 1.47 (average yield 4.410%). The Italian treasury looks to raise between EUR 2.5-3.5bln from this line.
- The 5.50% Sept'22 BTP was last auctioned in Apr'12 with a bid/cover ratio of 1.48 (yield 5.840%). The last three auctions on this line saw an average bid/cover ratio of 1.51 (average yield 5.527%). The Italian treasury looks to raise between EUR 2.0-2.75bln from this line.
Italy are the only Eurozone country to issue bonds this week which means competing supply should not be an issue in today's offering, and as Italian debt has made moves to the downside in recent times this provides buyers the opportunity to pick up Italian paper at their cheapest level against Bunds in the past three months. Despite this, concerns over the direction of the Eurozone crisis do still exist, with attention falling on Spain and the fragility of their banking system, as well as the ongoing political turmoil in Greece, and worries beginning to build over the ratification of the ESM and whether it will be implemented by its scheduled start date at the beginning of July.
Results are expected between 1000-1030 BST, often seen shortly after 1010 BST.
AUCTION PREVIEW: ECB's 3-month Refinancing Operation
Today the ECB is conducting its 3-month refinancing operation where a expectations are for the ECB to allot EUR 10bln with the expected range being EUR 5-25bln. In the last 3-month refinancing operation the ECB allotted an amount of EUR 21.34bln with 39 total bidders.
Results are expected between 1000-1030 BST.
AUCTION PREVIEW: US Fed's Outright Treasury Coupon Purchase Aug'20 – Feb'22
Today the NY Fed is conducting its Outright Treasury Coupon Purchase in the maturity range Aug 2020 – Feb 2022. This is the twentieth and penultimate operation of this series as part of the Fed's maturity extension program, and until May 31st 2012, the Fed expects to buy approximately USD 7.07bln in the remaining 2 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 4.50bln – USD 5.25bln. The last Outright Treasury Coupon purchase operation in the maturity range of 8 – 10 years was on the 18th May 2012, with a purchase size of USD 4.85bln and a submitted/accepted ratio of 2.22. It is worth noting that effective from September 30, 2011, the Fed plans to buy 29% 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.publicdebt.it, 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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