Halister News

(Bloomberg) -- Supply returns with an estimated EU17.5b in auctions scheduled, totalling ~EU14m/bp in risk terms, before drying up for the rest of the month as both Spain and Italy have now canceled their mid-August auctions as is common.

• Euro zone headline inflation is due on July 21; risks may be seen to the upside following stronger-than-expected German data on Friday
• BOE rate decision and August inflation report due on Thursday, with economists expecting rates to be held, with voting split 6-2. There are just three of the 47 surveyed -- including Nomura -- who forecast a rate increase
• Expect some focus on month-end duration extensions, which may support on Monday. Bloomberg Barclays index extension estimates show Eur Agg at 0.10y, and Sterling at 0.22y; breakdown here
• Citigroup sees extension of 0.09y for Europe, third-largest this year, with most support given to France, Spain and Italy; country breakdown here
  • Gilts are 0.41y, the largest in five years, primarily driven by 07/2018 UKT dropping out of the index
• SUPPLY/REDEMPTIONS: Auction supply may total around EU17.5b, equivalent to over EU14m/bp or 97k bund futures in risk terms
• Aug. 1: Germany to sell 0% 06/2019 for EUR4b
• Aug. 2: Germany to sell 0.5% 08/2027 for EU3b
• Aug. 3: Spain to sell 0.40% 04/2022, 5.9% 07/2026, 4.7% 07/2041 and I/L 2021; size estimated at 3b-4b
• Aug 3: France to sell 6% 10/2025, 1% 05/2027, 2% 05/2048 for EU5.5-6.5b
• There are no coupons eligible for reinvestment next week; redemptions worth EU42b from Italy and Spain are due to settle, though will likely have already been invested due to T+2 settlement
• U.K. to sell GBP2.25b 1.25% 07/2027 UKT on Aug. 1; equivalent to around 19k gilt futures; there are no coupons or redemption payments due
• NOTE: Auction calendar at ECO20 WE

To contact the reporter on this story: Stephen Spratt in London at sspratt3@bloomberg.net

--JON MORGAN

(Bloomberg) -- Libor is unlikely to “simply disappear” after 2021 given “the sheer volume of derivatives contracts and debt” currently tied to the benchmark, Pimco’s Rick Chan and Jerome Schneider write in blog post.

• Libor could survive “through oversight by a new regulatory body or by member banks,” but still expect increased use of benchmarks such as OIS, U.S. federal funds rate
• Near-term uncertainty about unwind “could increase spread volatility and create opportunities in products indexed to short-term rates”
• Investors should monitor situation as “transactable” benchmarks like repo rate and other replacements “gain traction”
• “We see a long road ahead before the BTFR will be fully deployed and widely used”

To contact the reporter on this story: Anna Windemuth in New York at awindemuth1@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

(Bloomberg) -- Canadian GDP seen rising 4.1% y/y in May after increasing 3.3% in April

(Bloomberg) -- Brazil Tax Agency, Federal Police and Federal Prosecutors are carrying out the 2nd phase of an investigation on a fraud of about 350m reais, according to Tax Agency emailed statement.

• Alleged crimes involve tax evasion, criminal organization, money laundering
• First phase of probe started on Nov., 2014

To contact the reporter on this story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net To contact the editors responsible for this story: Giulia Camillo at gcamillo@bloomberg.net Danielle Chaves