Today's BREXIT BARRAGE... From the ridiculous to the sublime...
This week in Parliament reminds me of this famous scene from Ghostbusters:
https://www.youtube.com/watch?v=O3ZOKDmorj0
BTW – The Telegraph and the FT are subscription services, as we know, but many of their articles on Brexit are available through your BBG terminal. Happy reading!
TEL: Theresa May to hold third ‘meaningful vote’ on her Brexit deal after MPs vote to extend Article 50
TEL: MPs quit Corbyn front bench amid ‘spineless’ Labour’s second referendum shambles
TEL: The Geoffrey Cox legal advice that Theresa May hopes will save her Brexit deal
TEL: Why Hammond’s Brexit war chest is smaller than it looks
TEL: Theresa May fights off Remainer attempt to seize control of Brexit by just two votes
BBC: March Brexit almost certainly out of reach
BBC: Brexit: May to try to persuade MPs for third time to back deal
BBC: Brexit: MPs vote by a majority of 211 to seek delay to EU departure
FT: UK Parliament votes overwhelmingly to seek Brexit delay
FT: Brexit delay but May is still fighting for her deal
FT: Business highlights worries over Brexit delay
BBG: Theresa May Wins U.K. Parliament’s Backing for Her Plan to Delay Brexit
BBG: Brexit Has Turned Into a Bad Monte Python Skit
BBG: The 310 Miles Breaking Brexit
BBG: Theresa May: The Servant Prime Minister
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
MICROCOSM: Vive La France! Time to TAKE PROFITS...
Eurozone... Vive la France!
> Updating last Wed's 'MICROCOSM: Get Long OATs Into Great Seasonals...' ideas (see attached)
> OATM9 has rallied 3 points so far in March, taking 10yr yields down to levels not seen since late 2016. The FRTR .75 11/28s remain pinned to their richest level and have shown little sign of relenting.
> As the rundown stated, C&R flows into Apr/May are huge which helps drive a seasonal outperformance of OATs vs other EGB names. That said, THESE MOVES SELDOM HAPPEN in a STRAIGHT LINE! And momentum indicators are flashing 'hit the bid!' right now.
> FRTR 5/28 v NETHER 7/28 is now +17.1bps mid - TAKE PROFITS on 1/2 our position and move stop to +18bps. The 17bps level was my initial target (+5.2bps locked in).
> FRTR 5/28-DBR 2/28 sprd has posted a similar performance, now +36.4bps, new lows for this move. Taking profits on 1/2 our position and moving stop to +37bps. That's a 6+bp profit.
- FRTR 5/27-5/34-5/48 fly… It’s richened from +14.2bps to +10.4bps. Again, we’re booking profits on ½ this position since the +10bps support level has proven a key level since October. We’ll move our stop to +11.4 and will target +9 on the balance.
- FRTR 5/27 into FRTR 5/34 MMS flattener… The only ‘stinker’ of the 4 of them as we’re now 2.2bps underwater. That said, the spread appears to be turning here and given my short-term bias, I like adding to the trade at these levels for a move back to the +11/12 area.
NEW POSITION!
- As an extension of the view above that these strategies are due for a breather, take a look at these BLENDS, buying NETHER vs DBR/FRTR and NETHER vs DBR/BGB. We can see in each of the charts below that the retracement of NETHER from the richening into 2019 has been sharp, making NETHER look cheap on a s/term basis.
The NETHER 7/27 vs DBR 2/27 and FRTR 10/27 blend in a 1-2-1 weighting. We can see that momentum on this fly has come a long way from rich back to cheap. The last time RSIs were this cheap, the fly snapped back 12bps over the next month. While that seems unlikely right now, this blend does exhibit a mean reverting bias over time.
Two newer versions that we like, take advantage of the shift to new CTDs in RXM9 and OATM8 which can help with liquidity.
NETHER 7/28 vs DBR 2/28 (RXM9) and FRTR 5/28 (OATM9) looks attractive here, despite the modest curve flattening bias embedded here.
Alternatively, if you’d like to avoid shorting OATs given their seasonals outlook, take a look at swapping BGBs for FRTRs, this version a 60/100/40 weighting to adjust for the wider spread of BGBs than OATs.
I’ll call to discuss.
Thanks
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... 'Slip slidin' away...'
Busy day in the press!
TEL: MPs to vote on delaying Brexit for three months
TEL: How likely is a delay to Brexit? Latest odds on how (and if) Brexit will happen
TEL: Can Article 50 be revoked and what would it mean to cancel Brexit?
TEL: Brexit extension: What time is the Article 50 vote tonight and will Brexit be delayed?
TEL: What Brexit means for EU holiday home owners
BBG: Brexit Heads for Delay as May Tries to Scare Up Support for Deal
BBG: Brexit Bulletin: Losing Control
BBG: Brexit Delay Adds Another Dimension to U.K. Economy
BBG: Brussels Edition: Who calls the shots?
FT: Theresa May issues ultimatum after MPs ditch no-deal Brexit
FT: Pound falls from 9 month high as Brexit drama rumbles on
FT: Will Northern Ireland dissidents be able to exploit Brexit chaos?
FT: Greece maps the long way back to a Brexit deal
FT: How pro-EU MPs humbled May on no-deal Brexit
FT: May could be losing her way to Brexit victory
BBC: Brexit: MPs to vote on delaying leaving the EU
BBC: Brexit: How can Article 50 be extended?
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... No Surprise But Still Disappointing...
BBG: U.K. Weighs No-Deal Brexit Vote as May Is Thrown Into Crisis
BBG: Theresa May Loses Voice, Vote and Possibly Job
FT: Power over Brexit slips from May’s damaged hands
FT: UK outlines tariff plan to limit no-deal Brexit damage
FT: Pound holds losses after Theresa May’s Brexit deal is defeated
BBC: Brexit: MPs to vote on 29 March no-deal exit from EU
BBC: Brexit: What happens now?
BBC: Brexit: EU points finger at UK for Theresa May’s deal defeat
TEL: No deal Brexit: What time is the vote and what will happen?
TEL: What happens next now the Brexit deal has been rejected? All the options explained
TEL: No deal Brexit latest odds tracker: Best bets on how (and if) Brexit will happen
TEL: What ‘no deal’ Brexit really means, and how it might affect daily life in the UK
TEL: The EU must shoulder its share of the blame for the Brexit imbroglio
TEL: Why extending Article 50 could be inevitable – and the consequences of delaying Brexit
Stay tuned!
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... But is it enough...?
BBG: May Strikes New Brexit Deal With the EU, Asks Parliament to Back It
BBG: This is What’s in Theresa May’s New Brexit Deal With the EU
BBG: Juncker Warns ‘It Is this Deal, or Brexit May Not Happen at All’
BBG: Pound Set for Wild Brexit Ride: Strategists See Possible Range of 10%
BBG: May’s Brexit Deal Lets Parliament Pick Its Poison
FT: May agrees revised Brexit deal with Juncker
FT: Breaking down the ‘last push’ to get May’s deal over the line
FT: Tory sceptics reserve judgement on May’s revised Brexit deal
BBC: Brexit: MPs to vote on Theresa May’s deal
BBC: Big Brexit vote: What do I need to know?
BBC: Brexit: Will May’s changes to her deal satisfy the Brexiteers?
TEL: Theresa May and Jean-Claude Juncker agree ‘legally-binding assurances on Irish backstop’
TEL: Second meaningful vote on Theresa May’s Withdrawal deal
TEL: William Hague: Brexit is there on the table. Take it and run, while there’s still a chance
TEL: Theresa May’s Brexit deal: how the maths behind Parliament’s factions break down
TEL: Revealed: Nigel Farage met Donald Trump and asked him to back a no-deal 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... Crunch Time... Again...
BBG: U.K. Asks EU for ‘One Last Heave’ to Get May’s Brexit Deal Done
BBG: It’s ‘Rainy’ Season for Brexit Barometer
BBG: A Deal, Soft Brexit or Reversal: Theresa May’s Muddled Endgame
BBG: Pound Falls as May Seen Failing to Get Brexit Votes: Inside G-10
BBG: BOE Asks Banks to Boost Liquid Assets Ahead of Brexit, FT Says
(This article has been refuted by one of our GEMMS, saying it’s not new information)
BBG: U.K. Cabinet Urges Tories to Back May’s Deal or Risk No Brexit
BBC: Brexit: Is the UK actually in crisis over leaving the EU?
BBC: Brexit talks deadlocked day before Commons vote on May’s deal
FT: Is it time to open a debate on the UK’s post-Brexit finances
FT: Theresa May faces heavy defeat in parliament after Brexit deadlock
FT: Pressure mounts on Theresa May to quit to save Brexit deal
FT: Conservative Eurosceptics prove impervious to May’s Brexit warnings
TEL: Theresa May facing threat to leadership as Commons defeat looms
TEL: What does the EU stand to lose in a no-deal Brexit?
TEL: How the City has moved £900bn out of UK already to prepare 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
US Feb NFP - Something for Everyone!
This is a bit of a mess which we suppose is due largely to the havoc the govt closure is still playing with the economy and jobs data by extension.
- The headline +20k Feb # with just a +12k revision caught the market off guard for sure. When we average the Dec-Feb job gains, however, we end up with 186k a month which is still pretty robust all things considered.
- Labor force fell 56k the last couple months and the pool of available labor fell 332k last month, hence the decline back to 3.821% on +255k gains.
- Avg hrly earnings came roaring back with a .4% MOM reading which takes the yoy level to 3.4%, impressive even with the .1 decline back to 3.1% in Jan. We can see that there’s a strong correlation between the AVE data and 1y1y USD swaps. This reading says the recent rally shouldn’t have happened.
- So, despite the head-scratcher headline 20k, this looks like solid data to us. The market clearly has no idea what to make of it (or perhaps has bigger fish to fry) because TYM9 is +3 ticks on the day. Bring on the weekend.
Avg hrly earnings (YOY-white) vs 1y1y USD swaps
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... Desperate Times...
BBG: May Asks EU to Help Break Impasse With Days to Save Brexit
BBG: May’s Larger-Than-Life Lawyer Becomes EU’s Brexit Villain No. 1
FT: May’s authority on the line as defeat on Brexit vote looms
BBC: May Urges EU to agree backstop changes
TEL: Theresa May to make last desperate plea to EU to change Brexit deal as crucial vote looms
TEL: More than half of UK’s 161 international agreements in doubt ahead of Brexit
TEL: Jacob Rees-Mogg says Conservative Government is not Right-wing
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
MICROCOSM: Quick Preview > £3 bn Tap of UKT 4/24s Today
GILTS...
- Quick UKT 1 4/24 Preview
- £3bn tap is last 5yr paper this fiscal year and takes the size to ~17.2bn. The last £3bn tap came in
- Chart below shows UKT 1 4/24s vs swaps back to last July. Both of the previous £3bn taps were met with a ~3-3.5bps cheapening vs swaps into the tap but traded well in the following couple sessions. While the £2.5bn taps were mixed, we rallied into the Nov tap, only to cheapen and in Jan we cheapened but stabilized post-auction. So, bottom line is 'buy the dip' has been a pretty good auction strategy.
- As for this tap, we're within 1.3bps of the cheapest this issue has traded vs swaps since November and GEMMS are expecting solid demand given the proximity of next week's APF reinvestment demand.
- There’s been a remarkable divergence between the yield of the UKT 1 4/24s and the performance of GBP since mid-January. We could argue that’s got something to do with the machinations in Washington and the outcome of US-China trade talks, etc but it’s more a reflection of the outlook for Brexit in our view. A good deal of Cable shorts have been unwound lately while gilts yields have been held down by the view that G-10 economies have hit the skids. We’re more inclined to look at the Q4/Q1 swoon in activity as more temporary than the market’s been pricing in and while the APF certainly provides a powerful ‘Lid’ on gilts yields all else equal, we view the outcome of Brexit a far more powerful influence over the next 2 months. So, while this cheapening in UKT 1 4/24s back close to the 100bps level is tempting, from a broader perspective short-medium gilts still look rich to us.
- From an RV perspective, these UKT 124s still trade a touch cheap to the swaps curve relative to it’s neighbours but the location of some of the more popular flies (like 0T23-124-225 for ex) don’t look all that compelling. (chart below) On a micro basis, the 2T24 into 124 sprd peaked at +1.8bps in Jan (into the tap) and 1.6bps this week, now 1.3bps – again – not all that compelling here, given the range lows back to Oct is 1.0bp. Lastly, we could argue where 124s should trade relative to their high cpn sisters (2Q23-2T24) on a fly but the chart below shows that it’s just a long-short call as this fly is very directional and current location looks rich here.
- So, net-net, this auction will likely see decent enough demand to take it down without much fuss. However, we don’t see anything glaringly obvious RV-wise to do into it.
UKT 1 4/24 MMS back to July
UKT 124 yields vs GBP
UKT 0T23-124-225 fly back to Sep
UKT 2T24-124
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.
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Today's BREXIT BARRAGE... Things that make you go 'Hmmmmm'...
Seems it’s going to take some black magic to get Barnier to budge as Mr Cox’s efforts are falling flat thus far… Tick tock.
TEL: Theresa May faces Commons grilling over talks with Brussels
TEL: Hammond loses ‘deal dividend’ as political chaos means businesses will not hike investment
TEL: Government could axe up to 90% of trade tariffs in no-deal Brexit
TEL: Emmanuel Macron’s call for further integration reminds Brexiters why they voted to Leave
TEL: Theresa May’s gamble has backfired – her MPs would sooner extend Brexit than accept her awful deal
FT: Bombardier presses DUP to back May’s Brexit deal
FT: Northern Ireland is warned of ‘grave’ impact of a no-deal Brexit
FT: How will Brexit affect UK house prices and mortgages?
BBG: Why Theresa May’s Brexit Figleaf May Not Bring DUP Onside
BBG: May Risks Another Defeat in Parliament Over Revised Brexit Deal
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