On Thursday at 09:50 BST, France will auction OATs: €7.5 - 9.0bn 3y 0.00% Feb22, 4y 0.00% Mar23, 6y 0.00% Mar25 (~RX 23k futs) and OAT€i: €0.75 - 1.25bn 5y 0.25% Jul24, 11y 0.70% Jul30, 28y 0.10% Jul47 (~ RX 6k futs) Views: There is a lot of choice on sale today with 6 lines. French bonds appear popular at the moment and more specifically in the higher maturities. The 6y Mar-25 is closest to the vein of demand and still remains fairly close in Z-spread terms to equivalent maturity Belgian paper but cheaper than the smaller issuers of Austria and Finland. However, bid-cover numbers our auction history tables below demonstrate that short (sub 7y) French bonds have been the recipients of quite elevated bid-cover ratios recently and these auctions should offer little difficulty to digest.

-After the June FOMC meeting, the whole FOMC dated OIS curve is pricing in an additional 9bp to 17bp cuts vs 1 day before the meeting -Market is fully pricing two 25bp cuts by September (just 2 meetings away), approx. three 25bp cuts by year end and four by June 2020!

Big moves yesterday after Draghi’s comments in Sintra. The #ECB dated #OIS curve shifted lower by 5-6.5bp meaning we are now almost pricing a full 10bp cut by September and almost 2 full cuts by July 2020.

An unmistakable new mood of caution seems evident in recent Federal Reserve pronouncements.

The Spanish Supreme Court ended the session on the Spanish mortgage tax (Impuesto sobre Actos Juridicos Documentados) yesterday without reaching a decision. The session will pick up today at 10:00 local. El Pais quotes sources saying that today's session will last for several hours.

President Trump continues, indefatigably, to turn up the heat on the Federal Reserve, but Fed officials have given no indication his harsh criticism will cause the independent central bank to diverge from its plan to keep gradually raising interest rates.

Has the Federal Reserve "gone crazy," as President Trump alleged in the midst of an 832-point drop in the Dow Jones Industrial Average and an even bigger percentage drop in the Nasdaq Composite? What is it really up to?

For many, many years the French OAT market has run an Apr/Oct coupon cycle for its bonds and these pay/mature on the 25th. Thus twice per year, there is always large coupons and often a large redemption.

The Volume Activity Charts (VAC) is a tool developed by InTouch Capital Markets to assist with technical analysis. It provides a new overlay to complement more traditional technical analysis techniques by highlighting key areas of recent high volume trading activity. InTouch Capital Markets use VAC as one input into its more comprehensive technical analysis product – the Technical Dashboard - that we produce daily for our Fixed Income clients (sample at bottom – VAC added on the top right)

According to the latest CFTC report on IMM positions, there was no overall trend for the US dollar in the week to Tuesday, October 2. • EURUSD’s fall from above 1.1800 to 1.1500 in the week covered attracted fresh EUR buying. Shorts were maintained, but the net demand resulted in a reduction in the overall short position by EUR610mn to -EUR10.2bn.