Halister News

(Bloomberg) -- Heavy supply ahead with almost EU27b of auctions slated for next week, totaling an estimated EU21m/bp in risk terms. BOE, Fed and BOJ meetings in focus.

• BOE rate decision on June 15; consensus is for no change on rates/QE; voting split expected to stay at 7-1, says Goldman Sachs
  • Citigroup says in note that “it’s fairly clear the MPC would like to see more two-way risk and some hike premium in the front-end”; there’s an outside possibility that BOE will escalate hawkish bias with “some members” joining a minority in voting for a hike
• FOMC expected to raise rates by 25bps in June 14 meeting. Fed-dated OIS rates show the market has priced in around 90% chance of an increase
• BOJ rate decision due early on June 16, no change in policy expected; HSBC notes that limited underlying inflationary pressures should keep the BOJ committed to its current expansionary policy stance
• SUPPLY/REDEMPTIONS: Auction supply may total EU26.75 equivalent to around EU21m/bp or 140k bund futures in risk terms
  • June 13: Netherlands to sell 0.75% 07/2027 for EU2-3b
  • June 13: Italy to sell 0.35% 06/2020 for EU2-2.5b, 1.85% 05/2024 for EU2.5-3b
  • June 14: Germany to sell 0.25% 02/2027 for EU3b
  • June 14: Portugal to sell 2.2% 10/2022, 4.125% 04/2027 for EU1-1.25b
  • June 15: France to sell 0.0% 02/2020, 3.0% 04/2022, 0.0% 05/2022, 4.25% 10/2023 for EU7-8b, as well as 8y, 10y and 30y I/L bonds for EU1-1.5b
  • June 15: Spain to sell 0.4% 04/2022, 1.5% 04/2027, 5.75% 07/2032, 4.2% 01/2037; Citigroup estimate size of the sale at EU4.5b
  • Redemptions are due to be repay by Germany and Italy. Germany will repay EU13b in old 2y, while Italy will repay EU8.9b in CCTeu and $2b in old 10y yankee
  • NOTE: Auction calendar is ECO20 WE

To contact the reporter on this story: Stephen Spratt in London at sspratt3@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma