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Tuesday's primary market highlights

** Primary issuance increased significantly on Tuesday where EUR20.35bn printed in the single currency (up from EUR4.5bn Monday), with combined demand for Tuesday's deals at a blowout EUR64.55bn. See IGM's DAILY EUR NICs & BOOKS Report for the full list of Euro issues on the day

** SSAs led the way thanks to a jumbo EUR9bn Apr 2027 deal from Kingdom of Spain and a large debut EUR7bn Jun 2039 Green bond from Republic of France which attracted demand of over EUR30bn and EUR23.5bn respectively. See IGM's SSA PREVIEW: Orders flood in for sovereign paper for more

** United Kingdom launched its first syndicated gilt offering of 2017, taking GBP4.5bn out of the Jul 2057 part of the curve. The issue attracted books of over GBP23bn, which according to our records is the largest demand ever seen for a syndicated gilt transaction.

** Dollar supply came on Tuesday courtesy of Province of Quebec and Nordic Investment Bank (NIB) which both issued 5yr Global deals, tapping the market for USD2bn and USD1.25bn respectively. For relative value analysis on these see IGM SSA PREVIEW: Trio of issuers keep the USD bandwagon rolling

** Turning to the corporate sector, and Imperial brands Finance PLC and EDP Finance kept Euro supply ticking over. The former priced an equally weighted EUR1bn 4.5yr/8yr dual-tranche exercise whilst EDP refreshed its curve with a new EUR600m long 6yr line. Demand at EUR6.9bn combined allowed pricing on the three tranches to be tightened by an average 15.66bps from IPTs. See IGM CORP SNAPSHOT for more background and analysis

** A duo of FIG borrowers falso ound markets receptive where NIBC Bank and Wells Fargo commanded interest of over EUR1.25bn and EUR2.9bn for respective EUR500m 5yr fixed and EUR2bn 5yr floating rates notes. More analyisis can be found in IGM's FIG SNAPSHOT

** The Covered bond market was again devoid of supply in single currency but there was some activity in dollars thanks to Landesbank Baden-Wuerttemberg (LBBW), which printed a USD750m Jan-2020 public-sector Pfandbrief. See IGM's COVERED SNAPSHOT for more colour including a comprehensive comps list


Wednesday's primary prospects

** After conducting an investor call on Tuesday, the Grand-Duchy of Luxembourg is set to pull the trigger on a new EUR 10yr issue which is being marketed at m/s -low/mid single digits IPTs. The official comps list can be found here

** The European Stability Mechanism (ESM) is ready to make its first foray of 2017, with the borrower eyeing a short 30yr EUR benchmark via Deutsche Bank, Goldman Sachs International and JP Morgan

** Credit Agricole Home Loan SFH could re-open the EUR covered bond market, having mandated for a long 8-year and/or straight 15-year soft bullet maturity, Obligation de Financement a L'Habitat benchmark. For relative value analysis see earlier IGM PREVIEW

** Turning to dollars, and European Bank for Reconstruction and Development (EBRD) is taking IoIs for a Feb 2021 USD Global at m/s +13 area IPTs (more here), whilst N.V. Bank Nederlandse Gemeenten (BNG) is marketing a USD Feb 2022 line at m/s +40 area IPTs (see BNG Preview)


Broader market developments on Tuesday

** EU risk assets made small gains with FTSEMIB outperforming peers, recovering more than Monday's 0.78% loss

** GBP/USD volatile on Brexit impulses - briefly spikes to highest level since 15th Dec, having headed south first after UK Supreme Court ruled that a Parliamentary vote is required to trigger Article 50. Brexit Min Davis - straightforward bill to be introduced in a couple of days, March deadline holds

** Eurozone PMIs produce mixed outturns. US Mfg PMI hits highest level since March 2015 (at 55.1), while Existing Home sales slightly missed although Nov data was revised a tad higher

** Govvies get hammered amid broader risk-on price action in equities with 10yr yields up to 2.5bps higher with Bunds leading the charge

** Brent rebounds, recovering all and more of Monday's 0.47% decline


Market snapshot (15.13)

GBP/USD -0.04% at 1.2472

SXXP +0.15% / SX7P +0.87% / Italy's FTSEMIB +0.98%

GER 2yr +1.4bps at -0.690% / 10yr +2.6bps at 0.384%

Brent +0.76% at USD55.65 / Spot gold +0.02% at 1215.3

iTraxx Main -0.9 at 70.0 / Crossover -3.7 at 290.3


What to watch Wednesday

** Data: German IFO headlines European data with all three modules seen rising in Jan, while sentiment indicators from France and Belgium are also on the agenda as well as UK CBI Trends Orders. New Home Sales, activity surveys and wholesale inventories form the US highlights

** Events: Watching speeches from BoE's Carney (16.00) and ECB's Weidmann

** Supply: Look out for any concession going into EUR1bn 2046 German bond auction, and USD15bn 2-yr FRNs and USD34bn 5-yr Notes from the US

** Earnings: 4 Stoxx600 and 31 S&P500 companies report


SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline


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