02 Feb 2018
Leading the industry in money fund news.
** The IG Euro primary market was open for business again on Tuesday. A modest EUR2bn of paper printed in the single currency with the corporate sector accounting for three quarters of this total. See IGM's Daily EUR Supply Snapshot for a breakdown of the day's deals
** Both Aroundtown Properties and Zimmer Biomet appeared to find going tough despite both taking a pragmatic approach to pricing and even offering the added security of a sub-IG coupon step-up in the case of the latter. Aroundtown Properties' long 6yr deal only managed to print at the tight end of IPTs and whilst Zimmer Biomet's debut two-parter was tightened 12/15bps during pricing, like Aroundtown's deal, still appeared to offer final eye-catching NICs of 30bps+. For more background and analysis on the two deals please see IGM's CORP SNAPSHOT
** These sizeable NICs offer more evidence that pricing power remains very much in favour of prospective investors in the current environment as mentioned in yesterday's IGM COMMENT titled 'Pay up or wait until next year'
** The only other Euro benchmark on Tuesday came from an SSA issuer in the form of the German Federal State of North Rhine-Westphalia which refreshed its LSA curve with a EUR500m Feb 2021 line
** With the ECB meeting taking place on Thursday, Wednesday perhaps remains the most available window to bring a new deal this week but with large NICs seemingly needed to get a deal done at the current time it may only be the less price-sensitive issuers that decide to pull the trigger. Some of those known to be monitoring the market after recently holding investor roadshows are the likes of AusNet, PSA Banque and Molnlycke
Broader market developments on Tuesday: Santa rally underway?
** Risk accumulation gathered pace Tuesday. No singular driver but comes as markets take ongoing Italian political uncertainty in their stride and data comes in generally firm
** German Factory Orders post huge beat in October showing Q4 got off to strong start. US Durable Goods and IBD/TIPP Eco Optimism also topped forecasts, adding to list of recent US data beats
** German yields nudged higher while 5y5y EUR inflation swap rate hit 1-yr high as ECB meet nears. Peripheral yields fell as political jitters subside seeing 30-yr Spain yield drop up to 11.5 bps. For more FI colour see here
** European Bank Index (SX7P) hits highest level since Jan 15th as Italian banks rebound
** iTraxx Main and Crossover touch multi-week tights with latter nearing test of post US election low at 316.4 (Nov 10th)
What to watch Wednesday:
** Data - German and UK Industrial Production for Oct to provide hard data on how Q4 started out with both seen rebounding, before attention shifts to US JOLTS
** Supply - Germany to issue EUR3bn 2018 Schatz, while UK goes longer with GBP2.25bn 2047 Gilts
IGM FX and Rates
31 Jan 2017
Between the inevitabilities of death and taxes one would like to hope there’s room for a comfortable, perhaps a long, retirement. Alas, the data on that possibility is rather depressing for an awful lot of Americans.