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** It was another lacklustre session for European primary markets where just EUR2.8bn printed in the single currency via 5 tranches. This brings the week's total up to EUR14.095bn which is well short of the EUR43.45bn issued last week. See IGM's DAILY EUR NICs & BOOKS for details on the 5 deals to price Thursday

** A duo of corporates found investors receptive in the shape of Sigma Alimentos S.A, which tapped the 7yr part of the curve for EUR600m, and Avinor AS which went for a longer 10yr tenor for its EUR500m deal. Demand topped EUR2.75bn and EUR1.8bn respectively, allowing the latter to secure funding with a negative NIC. For more on these corp deals see the IGM CORP SNAPSHOT

** Banco Bilbao Vizcaya Argentaria SA followed hot on the heels of CM Arkea's EUR500m 12yr Tier two bullet on Wednesday with a EUR1bn 10yr T2 bullet sub of its own. Pricing at m/s +270 was unchanged from IPTs though while demand at EUR1.3bn+ was down on the EUR1.9bn seen for CM Arkea's trade

Friday's potential primary supply

** Headline event risk in the form of US NFPs should add to the general primary market lethargy often seen on a Friday as reflected by the fact there were no confirmed deals lined up at the time of writing


Broader market developments

** EU risk assets were biased firmer into the close thanks to tech stocks and a more dovish than expected BoE, while DAX underperforms and DB earnings miss weighs on financial stocks

** BoE keeps policy on hold as expected with a unanimous 9-0 vote. Carney restates MPC's 'neutral' policy bias. Latest Inflation report sees 2017-2018 GDP and inflation forecasts upgraded (see details here) although BoE MPC members signaled increased concern about inflation and cited Brexit related uncertainty ahead

** GBP/EUR slumps sharply, but remains respects Tues's intra-day low

** Govvies - Gilts lead charge higher among core EGBs as BoE's Carney said there was more slack in the economy than previously thought. 10yr Gilt yield dropped to its lowest level since 23rd Jan. German and French 10-30s curves bull flatten. PGBs outperform peripherals. SPGBs reverse AM sell-off which saw the 30yr breach 3% for the first time since Feb 2016 in the run up to Spanish and French supply

** iTraxx indices start wider before grinding tighter. on course to snap 5-day widening streak with Crossover back below 300 level


Market snapshot (15.38)

SXXP -0.11% / SX7P -0.32%

GBP/EUR -1.23% at 1.1607

GER 2yr -2.6bps at -0.758% / 10yr -4.9bps at 0.415%

Brent -0.42% at USD56.56

iTraxx Main -1.1 at 72.8 / Crossover -4.2 at 298.6


What to watch Friday

** Data: It's Markit Services PMI day in Europe, although China kicks off with the Caixin Mfg PMI which is forecast to ease from an series high in Dec 2016. Italian EU Harmonised CPI eyes the highest level since Sep 2013 (est 0.8% YoY, prev 0.5%) and is thus expected to maintain the recent trend higher in price growth seen elsewhere in the Eurozone in Jan. The key event risk of the day though is the US labour market report (NFPs), while also on the US agenda are ISM Non-Mfg Composite, Factory Orders and Final Durable Goods

** Events: Only two central bank speakers to watch out for in the shape of ECB's Constancio and Fed's Evans

** Supply: There is no significant term supply scheduled on Friday 3rd Feb

** Earnings: 10 Stoxx600 and 6 S&P500 companies report


SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline


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