DAILY CLOSE: FTSE/Gilts extend gains in thin liquidity

** Credit Agricole wastes no time in building its USD non-preferred curve having started supply in the new asset class in Euros. See FIG Snapshot for more details.

Broader market developments on Wednesday:

** The FTSE extends gains (ca +0.5%), pushing over the 7.1k mark to significantly outperform peers, as UK markets return from the Christmas holiday. Index buoyed by mining stocks

** Otherwise, European equities were biased weaker. FTSE MIB forms the weakest link.

** That follows Tuesday's report that BMPS will require EUR8.8bn to adequately boost its balance sheet, notably more than the EUR5bn previously sought, raising speculation that the EUR20bn pledged by the Italian govt may not be enough to shore up the country's banking system

** US equities were weighed by weaker than expected pending home sales (-2.5% m/m vs +0.5% f/c & +0.1% prev)

** Bunds fell into negative territory having flirted with parity for most of the session, while Gilts pulled ahead, but struggled to make any meaningful progress past the 125.00 psych mark

** Oil bulls remained in the driving seat, albeit marginally in seasonally thin liquidity

** iTraxx Main and Crossover widen to their widest levels in just over a week

Market Snapshot (15.32)

• SXXP +0.19% / SX7P -0.24% / FTSE MIB -0.74%
• Brent oil +0.55% at USD56.40, but still respects Tuesday's USD57.15 intra-day high
• iTraxx Main +1.5 at 72.3 / Crossover +3.4 at 291.5

What to watch Thursday

** Data: No top tier releases in Europe or US. For the record though, UK reports Dec Nationwide House Prices, while Eurozone Nov M3 Money Supply is seen steady at 4.4% YoY

** Events: No speakers slated until after 1st week of January

** Supply: Watch for any concession going into Italy's EUR3.5-5bn BTP and EUR1.25-1.75bn CCTeu auctions

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline