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Primary market highlights on Thursday

** Primary activity slowed significantly on Thursday where EUR5.435bn of IG/split rated Euro paper printed, down on the EUR13.35bn which priced on Wednesday. For a breakdown of Thursday's trades see IGM's DAILY EUR NICS & BOOKS

** Corporates took centre stage with the asset class accounting for 61.36% (EUR3.335bn) of the total IG/split rated issuance. Peripheral names dominated with Telecom Italia, Italgas and Cellnex Telecom joined on the day by US borrower WP Carey. For more on Thursday's corporate trades please see IGM's CORP SNAPSHOT

** In SSA, Auckland Council's E500m 10yr RegS issue stood out in terms of the reception received from investors, at more than 2.7x covered after the final spread was ramped in 7bps from IPTs. Also in the market was Free and Hanseatic City of Hamburg with a E500m Jan 2025 LSA and Bpifrance with its E1bn Nov 2026 line, both of which were marginally covered, while State of Berlin priced a E100m Apr 2024 FRN

** In FIG there were no benchmark deals Thursday, leaving the week / year at EUR5.85bn and EUR12.7bn respectively. Despite the pause in supply, there were further signs of selective widening among recent deals though. See IGM's FIG SNAPHOT

** The covered bond market was also devoid of supply in the single currency but there was some sterling supply courtesy of BayernLB which issued a GBP250m Dec 2021 public sector pfandbrief. For more on this deal, including a comprehensive comps list, see IGM's COVERED SNAPSHOT

Friday's potential primary supply

** At the time of writing the only confirmed deal for Friday is a USD1bn 2yr for Nederlandse Waterschapsbank NV (NWB Bank), with the issuer taking IoIs at m/s +14 area IPTs via BMO and TD

Thursday's broader market developments

** US yields dropped and USD weakened, suggesting that markets are questioning assumptions about the Trump reflation trade in the wake of Wednesday's Trump presser. 10yr UST yields touched their lowest level since Nov

** Data saw EZ IP beat with a 1.1% rise in Dec (exp 0.6%), taking the YoY rise to 3.2% (highest since Jan)

** ECB minutes showed the decision at Dec meeting to trim monthly purchases was partly due to liquidity concerns

** EU risk markets opened defensively then chopped sideways. Healthcare stocks underperformed on Trump warning that drug makers were "getting away with murder".

** Govvies - peripherals were mixed with Portugal outperforming again while Italy underperformed in wake of BTP auctions.

Market Snapshot (15.45)

SXXP -0.48% / FTSE100 outperforms at +0.06% as at 15:44 (on course to continue 12 session winning streak, albeit marginally)

GER 2yr +0.2 / 10yr -0.5

POR 10yr -4.4

US 10yr -5.3

iTraxx Main +0.7 at 70.7 / Crossover +2.9 at 293.8

What to watch on Friday 13th

** Data: Light European agenda. Spanish final CPI expected to match flash estimate. Focus then shifts to US Retail sales, PPI and Uni of Michigan Sentiment

** Events: Remarks from Fed's Yellen (0.00) could set the opening tone, Harker also penciled in to speak (14.30)

** Supply: There are no significant term auctions scheduled on Friday 13th January

** UST cash markets are open usual hours but liquidity could dwindle early ahead of Monday's US holiday (MLK Day)

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

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