- FI Strategizer: "Weak US data along with uncertainty ahead of the 12M LTRO expiry should create a favorable environment for Bunds and UST. Pressure on periphery should stay high in the coming days."
- EU Portfolio Strategy: "We stay long duration: the G-20 over this weekend and next week’s US data should not change much the positive mood for FI."
- 12M LTRO: "Next week, the 12M LTRO held in June last year will mature. The amount to be rolled over will send an important signal about the health of European banks, will affect excess liquidity in the Eurosystem and will be crucial for the dynamics of MM rates."
- German Q4 funding: "Due to a decline in its deficit, Germany cut bond supply by EUR 2bn in 3Q vs. what was previously planned, an overall modest amount. We expect a more sizeable cut (ca. EUR 10bn) in 4Q."
- UK Budget: "This week, the UK released its emergency budget, which contained strong measures to cut the deficit. As a result, this year Gilt supply may be 28% lower than last year."
- MM: "Bids at the 1W MRO reached EUR 151bn. Data released by the CB of Portugal showed that Portuguese banks bid EUR 35bn of liquidity in May at the ECB, almost twice as much as in April."
- Supply Corner: "Next week, there will be ca. EUR 20bn of redemptions and EUR 14bn in coupons (from Germany), while gross supply should be EUR 18/20bn. Net supply should be slightly negative (EUR 0/-2.6bn)."
-FX Strategizer: "Choppy trading on FX majors should continue also in the aftermath of the G-20 meeting. Resuming global risk aversion should remain the key driver ahead of a sluggish US employment report on Friday, favoring both the JPY and the CHF."
- EUR: "Although the euro held the line despite falling stock markets and widening yield spreads & CDS across the eurozone, EUR-USD should face more downward pressure due to the renewed clouded risk picture."
- JPY: "Market euphoria for Beijing’s decision to allow the yuan greater flexibility has faded, but the JPY should stay firm as risk aversion persists: we wouldn’t rule out EUR-JPY to slide again towards 108, also helped by a stronger BoJ Tankan report."
- CHF: "Jordan’s explicit remarks that the SNB has no need to intervene in the FX market were clearly taken as a “green light” for more intense EUR-CHF sales: the full break of also the 1.35 wall is approaching fast."
- GBP: "The UK Emergency Budget proved to be tough enough to boost sterling. Cable should definitively break through 1.50 and move towards 1.51, while EUR-GBP should fall below 0.82 if EMU woes persist."
- Pacific Rim & CAD: "While resuming risk aversion may weigh further on the three commodity units, political uncertainty may represent a unique source of volatility for the Aussie dollar, after Gillard became the new PM and debate on the mining tax abruptly returned to the spotlight."
- Nordics: "The SEK and NOK trends may diverge for the time being due to monetary policy at home. The Norges Bank sounded cautious on more intense tightening, while the Riksbank should hike rates next Thursday."
Unicredit Curves&Crosses 20100625
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