HALISTER1: AUCTION PREVIEW: 10Y Bund Attractive Outright, Repo Supportive

AUCTION PREVIEW: 10Y Bund Attractive Outright, Repo Supportive

(Bloomberg) -- Germany to tap 0.25% 02/2027 for EU3b at 11:30am CET, equivalent to around 21k bund futures.
  • Analysts are optimistic about the sale given richness in repo ahead of quarter-end, attractive outright valuations
  • Mizuho (Antoine Bouvet)
    • Main attraction of this sale is outright valuation, with the 10Y yield having found support around the 0.50% level
    • From an RV perspective, 10Y sector underperformance on the 5s10s15s butterfly has exceeded what its directionality would warrant
    • Bond is attractive against swaps, given the likely large TLTRO support for cash bonds and likely elevation of EUR tail risks as we approach the French election
  • Commerzbank (Christoph Rieger)
    • Ahead of quarter-end, repo specials in the 10y basket have increased with some bonds quoted below -5% over the turn
    • With yields closer to the upper end of the range, and most EGB spreads near the lower end of their range on the back of the TLTRO hype, the auction should be absorbed without larger hiccups
  • ING (Martin van Vliet)
    • Outright yield levels are testing upper end of this year’s trading range at 0.5%
    • Recent ASW tightening has also pushed the z-spread of the DBR 02/2027 from below -50bp at the end of February to now around -42bps
    • Repo market specialness suggest dealer demand in the auction should be supportive

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Antoine Bouvet (Mizuho Financial Group Inc)
Christoph Rieger (Commerzbank AG)
Martin Van Vliet (ING Groep NV)

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UUID: 7947283

HALISTER1: Gilts Opening Calls: Futures Seen Opening Higher, Near 126.18/08

Gilts Opening Calls: Futures Seen Opening Higher, Near 126.18/08

(Bloomberg) -- Gilt futures called to open higher, with bunds and Treasuries underpinned by continued stock weakness.
  • U.K. to tap 1.5% 07/2047 for GBP2b at 11:30am CET; equivalent to GBP4.4m/bp in risk
    • Expect auction to be well received, with some marginal demand also expected on the back of month-end extensions, writes RBC in a client note
    • Both RBC and Santander see the bond as cheap in micro-RV and recommending buying the bond on the 45s/47s/49s fly and 46s/47s/49s fly, respectively
  • Gilt 10Y futures called to open at 126.18 (0.15) RX ref: 159.74
    • Called to open at 126.08 (0.05) based on TY ref: 124.38
  • NOTE: Opening call levels are derived from prices of equivalent bund futures since 7pm CET previous trading day; changes vs gilt closing prices at 7pm CET

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER: Akzo Nobel Rejects Second Unsolicited Takeover Proposal From PPG

Akzo Nobel Rejects Second Unsolicited Takeover Proposal From PPG

(Bloomberg) -- Akzo Nobel says revised PPG proposal fails to reflect co.’s current and future value, neglects to address the significant uncertainties and risks for shareholders and other stakeholders.
  • Akzo says proposal represents a value of EU88.72/shr
    • Says proposal doesn’t warrant co.’s engagement with PPG
Link to Statement:Link

Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
AKZA NA (Akzo Nobel NV)
PPG US (PPG Industries Inc)

Topics
Plastics

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UUID: 7947283