Today's BREXIT BARRAGE... Tories and Labour spanked in local elections...
Mess with the bulls, you get the horns! Voters sent a message – let’s hope May and Corbyn were listening…
FT: Will Jeremy Corbyn really do a deal with Theresa May?
FT: Tories and Labour suffer early losses (in election)
FT: EU to prepare for post-Brexit era with pledge to speak with ‘one voice’
BBG: Brexit Backlash Hits Main Parties in U.K. Local Elections
BBG: Carney Struggles to Make Himself Heard Above the Brexit Bedlam
TEL: Britain needs a ‘national deal’ with Labour on Brexit to stop future governments dismantling it, says Rory Stewart (Podcast)
TEL: Small wonder that big business has lost its voice: it’s deeply responsible for the mess we are in
Short and sweet today!
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's BREXIT BARRAGE... Election Day in the UK today...
FT: Brexit drains £30bn from UK funds
FT: Brexit makes case for an independent Scotland
FT: Williamson sunk by leak that could not pass unpunished
FT: May weighs remaining in EU customs union
BBG: U.K.’s May and Corbyn Hint Brexit Deal Could Be in Sight
BBG: Brexit Gives Some London Homebuyers Biggest Discount in Decade
BBG: May’s Conservatives Face Big Losses in U.K. Local Elections
TEL: Brexit makes a united Ireland more likely as Irish love affair with the EU deepens, poll finds
TEL: I’m very clear: no one dodges questions quite like Theresa May
Best,
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's BREXIT BARRAGE... More on May on May Day...
FT: Why Boris Johnson looms large over the Brexit endgame
FT: Corbyn sees off calls to back second Brexit referendum
FT: Theresa May’s allies accept her premiership is drawing to a close
FT: UK government is grinding to a halt
BBG: Theresa May Faces Triple Brexit Questions as She Runs Out of Moves
BBG: Labour Agrees to Support Second Brexit Vote Only as Last Resort
BBG: May Seeks to End Brexit Talks With Labour Next Week
BBG: Hunt Urges Tories Not to Challenge PM May Until Brexit Done
TEL: Theresa May preparing to cave in to Labour demands on Brexit, Eurosceptics fear
TEL: Theresa May will have ‘no option’ but to agree to a customs union, says Labour
TEL: The Tories must wake up to the existential calamity about to engulf them
More to come!
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's BREXIT BARRAGE... Are the wheels turning...?
BBG: U.K.’s May Facing Challenge From Grassroots Tories Over Brexit
BBG: U.K. Retailers Are Being Hit Hard by Brexit Uncertainty
BBG: U.K. Labour’s Split on Brexit Referendum Threatens Election Push
FT: Labour pressure builds on Corbyn over second referendum
FT: Conservatives are drawing the wrong lesson from the Brexit party
FT: Donald Trump can deliver Britain a post-Brexit trade boost
TEL: Dutch steal UK’s crown as most attractive destination in Europe for foreign investment
TEL: Theresa May set to delay Queen’s speech as her authority continues to wane
TEL: Jeremy Hunt warns Theresa May Brexit deal with Labour could alienate more Tory MPs
TEL: The collapse of Spain’s centre-Right could be taste of things to come for the UK
TEL: What does the City need to do to regain its political capital?
BBC: Labour to discuss ‘confirmatory ballot’ for Brexit
More to come!
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's Brexit Barrage...
Brexit news has become more of a trickle than a barrage I suppose… Here’s the latest:
FT: Brexit threatens pound’s status as global currency, survey says
FT: EU students to pay more to study in England under Brexit plan
BBG: Carney’s Not Sorry About Brexit Forecasts as Next Round Unveiled
BBG: U.K. Conservatives Still Seeking Brexit Deal Before EU Election
BBG: U.K. Markets Vulnerable to Any BOE Hawkish Surprise This Week
TEL: Tories braced for local election wipeout as deputy chairman warns of mounting anger on the doorstep
TEL: Brexit uncertainty is making UK assets a screaming buy, but not quite yet
TEL: Brexit and eco doom-mongers are driving us to despair, but in fact we’ve never had it so good
More to come…
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Astor Ridge Data, Supply and Events Calendars for Apr 29-May 3
Quick comment…
VERY busy week for data in both the US and Europe, including the US Payrolls data. From BBG’s consensus estimates of the data, it doesn’t strike me that the US and even European economies are about to plunge off a cliff.
The FOMC and MPC meetings will be very closely watched given the G-10’s assumed pivot to a more dovish outlook and the press’s focus on the loss of independence among the major CBs. There’s been a LOT of curve activity in the US this week, especially block trades in futures like TUM9 v USM9 which could be inclined to reverse course if the data/FED/MPC come in more neutral/bullish.
Supply in the US and UK is light but if Belgium, Italy and France bring what’s expected, we’ll have a chunky ~130k worth of RXM9 to deal with from Mon-Thurs. Index extension this month is large, especially in France but Thursday’s long-end supply arrives too late for inclusion. Market’s also watching the outcome of S&Ps ratings review of Italy this evening and Sunday’s Spanish elections to gauge demand into next week.
Calendars attached.
Best,
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Astor-Ridge-Rates-Events-Calendar-Apr-29-May-3.pdf Astor-Ridge-Econ-Data-Apr-29-May3.pdf Astor-Ridge-Supply-calendar-Apr29-May3.pdfToday's BREXIT BARRAGE... Will She Stay or Will She Go?
FT: Tories rule out early leadership challenge to Theresa May
FT: The dangerous allure of a fudged Brexit
TEL: Get set for higher taxes as Hammond warns on cost of ageing population
TEL: Why the next Governor (of the BoE) needs to be a Brexiteer
BBG: U.K.’s Brexit Woe Is an Extreme Microcosm of Global Trade War
BBG: Watch Out, U.K. Conservatives. Nigel Farage Is Coming After You
Short and sweet today!
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
MACROCOSM: EGBs - RV Implications of April Index Extensions
- April’s large coupon and redemption flows always help to generate large index shifts in EGBs, especially in France and Germany. This month’s no exception as tomorrow’s monster C&R flows of Eur 43bn in France lead a large liquidity wave into the market. (Spain’s 22.4/5.1 redemption/cpns related to their maturing SPGB 2.75 4/30/19s are too late to be included in April’s #s for some index providers like BARX but make it into others. Either way, there’s a tail-wind in SPGBs too, coming just after Spain’s elections on Sunday.)
- Here’s the latest data from BARX for the EGB issuers most affected this month. What’s relevant to us is not just the size of the duration move but the shift in the duration ‘bogey’ that could impact which underlying issue benefits most in the revised benchmark. We can also see that there are shifts in % country allocation that could impact net demand, especially from passive index accounts. The Apr/May Bench is the issue on the curve that most closely matches the duration bogey of the index. The last two columns are the curve sectors that are most affected by these index shifts.
|
Country |
% weight Apr |
% Weight May |
Apr Duration |
May Duration |
Apr Bench |
May Bench |
Curve sector 1 |
Curve Sector 2 |
|
Germany |
16.55 |
16.42 |
7.64 |
7.78 |
DBR .25 7/27 |
DBR .25 7/27 |
16+ +0.84yr |
4-7 +.35yr |
|
France |
25.15 |
24.95 |
8.13 |
8.33 |
FRTR 5.5 4/29 |
FRTR 5.5 4/29 |
16+ +1.57yr |
7-11 +1.30yr |
|
Italy |
22.02 |
22.29 |
6.55 |
6.55 |
BTPS 1.6 6/26 |
BTPs 1.6 6/26 |
7-11 +.71yr |
11-16 +.45yr |
|
Spain |
14.38 |
14.59 |
7.46 |
7.46 |
SPGB 1.5 4/27 |
SPGB 1.5 4/27 |
16+ .55yr |
7-11 +.52yr |
|
Netherlands |
4.87 |
4.92 |
8.27 |
8.28 |
DSL 5.5 1/28 |
DSL 5.5 1/28 |
7-11 +.30yr |
16+ +.13yr |
|
Portugal |
2.29 |
2.31 |
6.44 |
6.53 |
PGB 2.875 7/26 |
PGB 2.875 7/26 |
16+ +.15yr |
7-11 +.13yr |
|
Ireland |
1.95 |
1.78 |
7.37 |
8.02 |
IRE 1 5/26 |
IRE .9 5/28 |
N/A |
N/A |
|
Finland |
1.57 |
1.48 |
6.87 |
7.44 |
RFGB .5 4/26 |
RFGB .5 8/27 |
16+ .22yr |
4-7 +07yr |
- Observations:
- Germany’s % of the broad index dips a bit but the duration extension is significant. The benchmark is unched but the sector shifts argue for a short 5-10-30s fly into month-end. See graph below.
- France remains the largest component of the broad EGB index, even with the .2% decline in their % allocation. The 0.2yr index extension is significant in risk terms (given how big they are), however, price action to start the week suggests the market was well positioned for the Apr seasonal rally in OATs. The benchmark issue is an old high-cpn off the run issue that, while large at Eur 35.6bn+, has had 2.7bn of them stripped and is prone to bouts of illiquidity. More importantly for us, however, is the issue has richened 4.5bps vs the FRTR 5/28s and FRTR 5/30s since late March, reflecting the richening/tightening of OATs and this large index move.
- Italy’s share of the index rises .27% in May with duration #s that are unched. The BTPS 1.6 6/26s have been perennially rich to the BTPS curve, due to their ‘safe haven’ status as a low cpn issue but also their usefulness as a BTPS index barometer. Chunky curve extension of .71yrs in the 7-11yr sector argues for a curve-flattener into month-end although this week’s bumpy performance in IKM9 adds an element of risk here. Perhaps micro flatteners like the BTPS 1.25 12/26 into BTPS 2.05 8/27s makes sense, still close to the wides on a Z-sprd box…
- Spain’s situation is similar to Italy’s with a bit of a twist. While Spain’s duration is unched (at least for BARX’s index), their share of the broad index rises .21% and there’s a nice Eur 27.5bn boost coming on Apr 30th from the maturing SPGB 4/30/19s. We’ve been big fans of SPGBs this year given Spain’s bright outlook within the Eurozone and the still relatively generous spreads they trade at vs OATs. That said, this Sunday’s elections in Spain could be a speed bump on their road to prosperity that we’re happy to be sidelined for. A benign outcome will have us jumping on long SPGB vs OATs and BTPS blends and curve flatteners in Spain. The SPGB 7/33 vs FRTR 5/34s spread we’ve been in and out of (took profits on our narrower at 70bps mid last week) is now back to 75.75bps and hopefully on its way to the +80bps zone where we’ll be buyers again.
- Holland’s stats are pretty benign all told. At under 5% of the index NETHER paper could be considered an after-thought by the big players. That said, it’s solid credit rating and spread nestled between DBRs and OATs makes them an interesting play. The benchmark issue is an old high cpn issue that doesn’t trade much so we would imagine most have a blend of NETHER 7/27s and 7/28s. We’re still long NETHER 7/28s vs DBR 2/28s and FRTR 5/28s.
- Portugal, Ireland and Finland barely surpass Holland’s share of the index, making them more tactical plays than core positions. We’ve seen over the last couple months that their bonds can offer nice opportunities given one has the patience to keep a close eye on them. The duration extension in Ireland this month has been well prepared for with the 5/26-5/29 spread at its lows and IRISH-FRTR 10yr spreads narrowing 18+bps this year, now at 16.4bps, just off the lows seen last June. Brexit is still a worry for Ireland but you’d never know it from the way their bonds trade. Finland’s index move this month is substantial enough to cause a shift longer in their bogey but, as with IRISH, this is largely priced in.
- Graphs:
DBR 5-10-30s fly – still rich…
FRTR 5/28-4/29-5/30 fly – Richening into April’s seasonal bias
BTPS 1.25 12/26 vs BTPS 2.05 8/27 MMS box
SPGB 7/33 vs FRTR 5/34s sprd has bounced since we took profits last week – looking to get back in around +80bps…
We’ll be in touch.
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's BREXIT BARRAGE...
FT: Conservative grandees warn Theresa May her time is almost up
FT: Theresa May plans new Commons Brexit vote in high-stakes move
FT: Hedge funds warm up to the prospect of a pound rally
FT: Bad news for the ‘Global Britain’ Brexiters
FT: Remainers look as fractured as they did in 2016
FT: London commercial property starts to feel Brexit chill
BBG: May Considers Latest Gamble to Get Brexit Done Within Next Month
BBG: Brexit ‘Rules of the Game’ Urgently Needed, U.K.’s Bailey Says
TEL: Theresa May told by Cabinet ministers to dump talks with Labour and sort out her Brexit deal
TEL: Why a rule change by the 1922 Committee to remove Theresa May could backfire on Conservatives
TEL: Small wonder that central banks, including the Bank of England, find their independence under threat
More to come!
Mark
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Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796
Today's BREXIT BARRAGE... Same as it ever was...
Looks like the Tories have spent their Easter break sharpening their knives…
BBG: May Returns to Face Brexit Crisis as Leadership Pressure Grows
BBG: Paris Is Going All Out for London’s Brexit Exiles
BBG: Britain Turns to Politics of Protest as Brexit Drift Persists
BBC: Brexit: Cross-party talks to resume
BBC: Brexit: Labour must back another referendum – Tom Watson
FT: Brexit shows flaws of ‘nationalistic’ politics, says Greek PM
FT: Britain told it is losing influence in Washington
FT: Brexit-backing Tory activists to seek Theresa May’s resignation
FT: Is there any hope left for Theresa May’s Brexit deal?
FT: Brexit has a chance to kick-start a period of radical change
TEL: No mainstream party is safe from the march of populism
Enjoy!
Mark
image009.jpg@01D28D1B.42BD95C0">
Mark Funsch
O: +44 (0) 203 - 143 - 4177
M: +44 (0) 789 - 996 - 4051
UK: 14-16 Dowgate Hill, London UK EC4R 2SU
US: 245 Park Ave, 39th Floor, NY, NY, 10167
This research was prepared by Mark Funsch. He is a consultant with Astor Ridge. A history of his marketing commentaries can be provided upon request in compliance with the European Commission’s Market Abuse Regulation. Astor Ridge takes no proprietary trading risk, has no market making facilities, and has no position in any security we discuss in this e-mail. The views in this e-mail are those of the author(s) and are subject to change, and Astor Ridge has no obligation to update its opinions or the information in this publication. If this e-mail contains recommendations, those recommendations reflect solely and exclusively those of the author, and such opinions were prepared independently of any other interests, including those of Astor Ridge and/or its affiliates. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the clients who receive it. The securities discussed herein may not be suitable for all investors. Astor Ridge recommends that investors independently evaluate each issuer, security or instrument discussed herein, and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results.
You should not use or disclose to any other person the contents of this e-mail or its attachments (if any), nor take copies. This e-mail is not a representation or warranty and is not intended nor should it be taken to create any legal relations, contractual or otherwise. This e-mail and any files transmitted with it are confidential, may be legally privileged, and are for the sole use of the intended recipient. Copyright in this e-mail and any accompanying document created by Astor Ridge LLP is owned by Astor Ridge LLP.
Astor Ridge LLP is regulated by the Financial Conduct Authority (FCA): Registration Number 579287
Astor Ridge LLP is Registered in England and Wales with Companies House: Registration Number OC372185
Astor Ridge NA LLP is a member of FINRA/SIPC: CRD Number 282626
Astor Ridge NA LLP is a member of the National Futures Association (NFA): Firm ID Number 0499303
Astor Ridge NA LLP is Registered in England and Wales with Companies House: Registration Number OC401796