** The primary market started the week with a complete blank across all asset classes on Monday with issuers sitting out the session due to Italian political uncertainly following the stronger than predicted 'No' result in the Italian referendum and subsequent resignation of Matteo Renzi as Italian Prime Minister
** With no fresh supply on the day, perhaps the headline news for Credit was the latest CSPP update from the ECB, where the central bank revealed it holds EUR48.243bn of corporate securities as of 2nd Dec. This latest data implies a slightly increased daily purchase rate of EUR402m which is up from EUR382m the week previous. The ECB also revealed the breakdown of the holdings, revealing that 13.73% of total purchases have been made in the primary market as of 30th Nov with the remaining 86.35% acquired in secondary. For more in depth analysis see IGM's ECB CSPP REVIEW
** Looking to potential near-term supply prospects and whilst the corporate pipeline remains fairly well-stocked, the issuance window is shrinking with the looming Christmas break and of course this Thursday's ECB meeting which potentially leaves Tuesday and Wednesday as the most available windows for new supply. Also, with recent indicators illustrating that pricing power remains in favour of potential investors, any would-be issuers may not want to pay up to get a deal done and instead hold off until 2017. For more see earlier IGM COMMENT: Pay up or wait until next year?
Broader market developments on Monday:
** EU stocks and credit slump at the open on strong voter rejection of Italian Senate reform, then mostly recover as risk accumulation resumes. Italian banks key underperformers though as political uncertainty threatens to stall planned recapitalisations
** Bunds do the opposite with opening FTQ bid quickly faded and 10yr yields touching fresh 3-week high at 0.377%, almost doubling from last week's low point. BTPs underperform but 10yr BTP/Bund spread easily contained by last week's wide seen before ECB source story touting possible front-loading of BTP purchases. For mor see IGM's EU FI Close
** Service PMI revised lower in EZ in Nov, while UK and US readings beat, but limited impact seen
** Stoxx600 +0.6% as at 15.30 GMT, having been up to 1.6% firmer, with consumer stocks outperforming, DJIA touches all time high
** iTraxx Main and Crossover 0.2 wider and 3.9 tighter, having been 2.6 and 8.1 wider at the open
What to watch Tuesday:
** Data: German and US factory orders, Eurozone Q3 final GDP, US Trade data and Durable goods form key highlights
** Events: No central bank speakers scheduled in run up to Thurs ECB policy meeting and the 14th Dec Fed rate verdict, for which markets are still ascribing a 100% probability of a move higher following a solid US employment report last week
** Supply: Watch for any concession going into UK's GBP2.5bn of 2026 Gilt auction
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