02 Feb 2018
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Thursday's primary market
** It was another hectic session for primary markets on Thursday with all asset classes again represented and paper in EUR, USD and GBP all on offer. In terms of overall EUR supply, a further EUR11.7bn printed courtesy of 15 individual deals from 13 separate borrowers. See DAILY EUR NICs & BOOKS
** Combined with frantic sessions on Tuesday (EUR7.5bn) and Wednesday (EUR19bn), that brings the week up to EUR38.2bn
** The pace could now temporarily slow though given Friday's Epiphany holiday and US NFPs
** Boding well going forward, however, is that demand is still exceeding supply, evidenced by general levels of oversubscription, restrained NICs, spread compression during execution and positive post-pricing performance
** In FIG, BBVA (EUR1 bn 5yr) and BFCM (EUR1.25bn 5yr) provided the first benchmark sized traditional senior supply of 2017 and the response was positive with combined demand topping EUR4.8bn. Allianz SE catered for higher yielding palates with a T2 (EUR1bn 30.5NC10.5) although demand was less spectacular (books were "in excess of EUR1.5bn"). See IGM's FIG SNAPSHOT
** A further trio of corporates hit the screens with the deals from ASF, FCE Bank and Berkshire Hathaway's two-parter bringing total corp issuance for the week up to EUR6.6bn. The four tranches on the day were tightened by an average 20.75bps from IPTs on the back of strong demand which resulted in an average NIC on the day of just 4bps. FCE Bank's Sep 2021 line printed flat to the issuers existing curve. IGM's CORP SNAPSHOT
** Covered saw another five deals hit the screens, including Coventry Building Society who reopened the Euro markets for UK issuers. IGM's COVERED SNAPSHOT
** in SSA, MuniFin gets job done, building its fledging Euro curve with a EUR1bn n/g Nov 2026 line, having attracted demand of EUR1.15bn as at the last update. The deal offered a NIC of 5bps at m/s +1bp reoffer level, unch from IPTs
Supply to watch out for
** Issuance is likely to drop significantly on Friday due the aforementioned partial European holiday and of course payrolls. This is likely to leave issuers predominately focused on lining EUR deals up for what is expected to be another busy week next week
** Away from the single currency IBRD and BNG are both set to print GBP issues on Friday. BNG is taking IoIs for a Mar 2022 bmk at UKT +48 area whilst IBRD is touting a Dec 2021 bmk at UKT +30 area (both IPTs)
Thursday's broader market developments
** EU stocks flipped between gains and losses while Crossover underperformed Main again as a few chips came off the table ahead of payrolls
** Data saw UK PMI hit a 17-month high, EZ PPI turned positive for the first time since Jun 2013 but US ADP Employment data missed
** In govvies, the tone was defensive amid auctions from Spain, France and UK. A minor repricing of peripheral bonds a key feature with Portugal the weakest link. Short dated German yields rose. See IGM's FI close
** EUR swap spreads tightened again amid the continuation of high volumes of swapped new issuance
Market snapshot (15.45)
2yr GER +6bp, 10yr GER -0.5bp
10yr PGB +15bp
iTraxx Main +0.3 at 68.4 / Crossover +4.8 at 287.1
Event risk to watch for on Friday
** Data: German retail sales and factory orders are forecast to turn negative in Nov, ditto for Eurozone retail sales, while the majority of Eurozone sentiment indicators are seen a tad higher in Dec. Focus of the day will be on US NFPs (est 180k, prev 178k). Also out are the US trade balance, Factory orders and durable goods orders.
** Events: It's Epiphany holiday in Europe. ECB's Mersch forms the first ECB speaker of 2017. Trio of Fed central bankers also lined up to speak (Evans, Lacker and Kaplan).
** Supply: There are no significant term auctions scheduled on Friday 6th January
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.