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Monday's primary market;

** The European primary market started the week with a bang on Monday where a combined EUR10.25bn of paper was issued in the single currency, with all asset classes represented. For a breakdown of Monday's issuance see IGM's DAILY EUR NICS & BOOKS report

** The covered bond market was again the busiest sector in terms of numbers of deals with Swedbank Mortgage, NordLB, SCBC and BNS pricing a combined EUR3.75bn on the day. This after the jurisdiction lead the way in terms of supply last week where a total of 11 tranches priced for EUR12.75bn (IGM's WEEKLY VOLUME REPORT for w/e 6th Jan is here). For more on the day's covered trades, including fair value please see IGM's COVERED SNAPSHOT

** In FIG, following last week's EUR6.85bn of supply which spanned the full spectrum of the capital structure, the new week started with senior supply from Credit Agricole (EUR1bn Sep 2024) and T2 issuance from Commerzbank (EUR500m 10yr bullet). Respective demand at around EUR1.9bn and �north of EUR700mn" was notably below that seen for comparable deals last week though. Among recent deals our snapshot showed shorter paper outperforming the longer end, also hinting at a more cautious mindset. See IGM's FIG SNAPSHOT

** Three corporates hit the screens on Monday with EUR deals where American Honda, Enel SpA and HeidelbergCement all secured very economic funding. Enel printed with a low single digit NIC, Enel priced flat to its existing curve, whilst HeidelbergCement secured EUR750m of 4yr funding 3bps through fair value. What was notable on the latter was the sensitivity in the book with final demand of over EUR3.1bn, having peaked at a much larger EUR4.5bn earlier in execution (Distributions stats are here). For a more in depth look at the day's corp transactions please see IGM's CORP SNAPSHOT

** With it being a Monday, the ECB released its latest CSPP update where the central bank revealed it holds EUR51.84bn of corporate securities as of 6th Jan. For more see IGM's ECB CSPP REVIEW


Tuesday's potential primary supply

** More covered supply looks to be on the way courtesy of Erste which has hired Cr�dit Agricole CIB, Erste Group, ING, LBBW and Natixis for a 10yr EUR benchmark Hypothekenpfandbrief. French multinational company Imerys held an investor call Monday and could launch a EUR 10yr benchmark as early as Tuesday via BNP Paribas, CM-CIC, Commerzbank, HSBC, Morgan Stanley, MUFG and Natixis

** NN Group N.V. is lining up a potential EUR dual-tranche benchmark 31NC11 dated Subordinated and 6-year senior unsecured transaction via Citi, ING, J.P. Morgan and Morgan Stanley after also conducting an investor call Monday

** The European Financial Stability Facility EFSF looks set to make its first foray of the year on Tuesday, having mandated Barclays, HSBC and SG CIB as joint lead managers for a short 6-year EUR benchmark transaction due November 2022 whilst NWB.Bank is aiming for the longer 10yr part of the curve via Barclays, BNP Paribas, Citi and JP Morgan

** Away from the single currency, a quartet of SSA's are targeting the Dollar market on Tuesday with KfW and IADB both taking IoIs for USD 5yr Global deals whilst Kommuninvest and Dexia CL are marketing USD Mar 2020 and Feb 2020 issues respectively


Broader market developments on Monday

** European stocks fade early gains despite some better-than-expected European data, which saw EZ's Sentix investor confidence hit its highest level since Aug 2015

** FTSE100 bucks declining trend in stocks and carves out a fresh historical high, supported by GBP weakness on renewed hard Brexit concerns

** GBP/USD touches lowest level since end-Oct 2016

** Govvies were inspired by the slight risk-off sentiment in equities with yields lower across the board with PGBs leading the decline, while Gilts outperformed Bunds by quite some distance

** Brent plunged and was on course to end a 3-day winning streak, amid speculation that OPEC production cuts could revive output in North America

** iTraxx indices widen and move sideways. Main respects Fri's wide, Crossover on course for 4-day widening spell having touched a one-week wide

** COMMENT - Aging America To Stifle Growth

Market snapshot (15.50 GMT)

** SXXP -0.6% / SX7P -2.03% / FTSE100 +0.20%

** GER 2yr -0.8bp / 10yr -1.2bp

** Brent -2.50%, following 3-days of gains totaling 2.91%

** GBP/USD 1.2162

** Itraxx Main +0.5 at 69.2 / Crossover +2.8 at 290.8

Event risk to watch on Tuesday

** Data: UK BRC Retail Sales provides the sole domestic release. French Industrial and Manufacturing Production are both seen rebounding in Nov. Afternoon focus will be on US JOLTS Jobs (f/c 5517 from 5534).

** Events: None scheduled

** Supply: Watch for any pressure on Govvies going into raft of bond auctions from the Netherlands (up to EUR1.25bn), Austria (EUR1.1bn), UK (GBP750m Linker), Germany (EUR1bn Linker) and US 3-Year Notes (USD24bn)


SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline


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