Halister News

--ELISA MARTINUZZI

(Bloomberg) -- France plans to sell total of EUR6-7b in 0.25% 11/2026, 1.5% 5/2031 bonds at auction.

• Rich repo levels hint at short covering demand, while reduced size is supportive, analysts remain cautious given political risk

• Citigroup (Saumesh Dutta)
  • Both issues have lagged on the curve; 10-year has cheapened on the 2s10s30s fly over the past five months, while 2031 bond has cheapened on 7s15s30s curve in past four months
  • Both issues have also underperformed swaps and core peers over the past month, though given headline risks don’t rule out further widening going forward

• Mizuho (Antoine Bouvet)
  • Election uncertainty is likely a challenge for long end French supply; limited size and the shorter duration of these bonds, compared to previous long-end sales should support
  • The 05/2031 bond has performed well on the curve, which suggests good client demand; both bonds are special on repo, indicating potential for short-covering demand

• ING (Padhraic Garvey)
  • With 10-year France-Belgium spreads at record wides, auction offers a good opportunity to switch into OATs, for those assuming Ms Le Pen won’t win the presidency

(Bloomberg) -- Coutts has “seriously breached money laundering regulations by failing to carry out adequate background checks into business relations and transactions” in connection with Malaysian sovereign wealth fund 1MDB, Swiss Financial Market Supervisory Authority (FINMA) says in a statement.

• FINMA says it ordered the bank to “disgorge unlawfully generated profits” of CHF6.5m
• Says it will consider opening enforcement proceedings against bank employees that were responsible
• NOTE: Oct. 11: Swiss Regulators Target UBS, Falcon Bank in 1MDB Crackdown