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With parts of Europe out due to the All Saints day holiday, issuance in the single currency drew a blank for the second consecutive day on Tuesday with the only deal across all sectors and currencies coming courtesy of Aberdeen City Council. That came in the form of a GBP370m Feb 2054 linker at UKTi +125 via sole bookrunner HSBC, with books last reported above GBP370m.

The risk tone on the day wasn't the most supportive either with some fleeting positivity at the open, seen off the back of better Chinese PMI data and recovering oil prices, fizzling by late afternoon. Also creating some turbulence was a decision by Standard Chartered not to redeem one of its junior sub bonds (6.409 01/49) at its call date in January, sending the price plummeting by circa 13 points (see here for more detail), As at 15.40, that left Stoxx50 0.53% lower, reversing an early gain of 0.66%, while iTraxx Main and Crossover were wider by 1.2 and 4.0 respectively to touch their widest levels in more than two weeks.

Activity set to resume Wednesday

However, with all European players back Wednesday we look set to see some fresh supply as issuers look to capitalise on the small window of opportunity ahead of looming event risk, namely the Fed's latest verdict on Wednesday evening, the BoE meeting/IR on Thursday and then US Payrolls data on Friday ahead of the US election next week.

One issuer known to be readying a deal is American conglomerate manufacturer of industrial products Dover Corporation. The issuer, rated A2/A-/A, is looking to refresh its fledgling curve with a new EUR 10yr benchmark transaction as early as Wednesday via JP Morgan, BAML and Wells Fargo. This follows an investor roadshow last week where Dover Corp was garnering interest for a 10-15yr transaction.

The borrower's only outstanding deal in the single currency is a EUR300m 2.125% Dec 2020 line which launched back in Nov 2013 and was seen trading at circa +55 bid on Tuesday afternoon.

Dover Corp will follow a recent glut of Euro supply from US issuers after Verizon Communications, PPG Industries Inc, Whirlpool Finance Luxembourg S.a.r.l., and Merck & Co Inc all visited the market to print a combined E5.65bn in the single currency last week alone.

Also known to be eyeing the Euro market are US compatriots American Express and Medical Properties as well as G4S and Fonterra which have all recently held investor meetings.

Away from corps and German States Lower Saxony (AAA Fitch) and Berlin (Aa1/AAA) have mandated banks for EUR250m re-openings of their respective 0% Aug 2024 and 0.625% Aug 2036 LSAs. The former has hired DekaBank, HSBC and Nord/LB whilst DekaBank, Deutsche Bank, DZ Bank, LBBW and UniCredit are in the driving seat for the Berlin trade with both set to price on Wednesday.

Event risk to watch out for Wednesday

Markets will be fully in the shadow of the Fed on Wednesday with the policy verdict at 18.00GMT, although no policy change is expected ahead of Friday's key US NFP release and the US Presidential election on 8th November.

Markets are currently ascribing a 71.4% probability (via Bbg WIRP) of a rate hike in Dec, which comes after preliminary Annualised Q3 GDP surprised on the upside last week at 2.9% QoQ versus 2.6% forecast and 1.4% previously.

Otherwise, in Europe, it's Markit Manufacturing PMI day (for Oct) where peripherals report for the first time and forecasts point to a pick-up in both Spain and Italy, suggesting upside risks for the final pan-EZ version which follows, ceteris paribus.

German labour data should show a modest drop in the number of jobless people in Oct, forecast to reverse the 1k rise seen in Sep, which should leave the Rate steady at a record low 6.1% for the 6th consecutive month in a row.

UK Markit/CIPs Construction PMI is seen weakening to 51.8 in Oct from 52.3. That follows a marginally weaker out-turn for the Manufacturing sector on Tuesday and comes a day ahead of the Services PMI on Thursday, where much of the focus will lie given the sector's larger contribution to GDP.

Across the pond and in terms of data, the ADP Employment report provides the final insight on the labour market going into Fri's NFP.

Supply wise, Germany and the UK plan to sell EUR3bn 2026 bonds and up to GBP400m 0.625% 2040 Linkers respectively.

Earnings consist of 19 Stoxx600 and 38 S&P500 companies.

For pricing details / pipelines by sector, please see the following;

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

matthew.barrett@informagm.com, david.corbell@informagm.com, kajal.mawdia@informagm.com

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