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Monday's primary market highlights

** The European primary market started the week on the front foot on Monday where a total EUR5.8bn of paper was issued in the single currency with all asset classes represented. See IGM's DAILY EUR NICS & BOOKS for a breakdown of Monday's supply

** SSAs were the most active with German State Berlin, Rentenbank and EFSF issuing a combined EUR3.25bn. For relative value analysis on the latter two, see earlier IGM SSA PREVIEW: EFSF targets 26yr, Rentenbank long 7yr in Euros

** FIG saw Santander Consumer Finance Bank AS (A3/A-) extend its curve with a EUR500m 3yr line which landed at m/s +45 (from +60 area IPTs), representing a NIP in the region of 7bps. That was after orders topped EUR2.4bn, showing plenty of cash remains on hand for the right trade. Otherwise, French paper came under further pressure as the 10yr Bund/OAT spread widened to a fresh multi-year wide, reflecting heightened political anxiety. See IGM FIG SNAPSHOT

** Covered supply came via Danske Bank and Credit Agricole Home Loan SFH with the former bringing a new EUR1bn 5yr Danish covered line whilst CASA Home Loan re-opened its 1.5% Feb 2037 OFH for EUR400m. More can be found in IGM's COVERED SNAPSHOT

** Swedish medical device company Molnlycke Holding AB tapped the 8yr part of the curve for EUR500m at m/s +135. This after the issuer initially held a series of investor meetings in December before deciding not to access the market at that time due to less than favourable market conditions. The decision to wait appears to have been a good one with final demand for the issue topping a blowout EUR3.25bn which allowed the issuer to tighten pricing an eye-catching 30bps during the execution process. For more on this deal see the IGM CORP SNAPSHOT

** The ECB released its latest CSPP update Monday, with the central bank announcing it holds EUR60.98bn of corporate securities as of 3rd February. The latest data implies a monthly purchasing rate of EUR7.52bn, which is up from EUR7.47bn the previous week. For more see IGM's ECB CSPP Review

IGM European Weekly Credit Excel Spreadsheet

** The IGM European Weekly Credit Overview is your comprehensive round-up of primary European new issue activity in Excel format, which allows users to conveniently download, save and edit the data as required. As well as new issue terms and conditions the spreadsheet incorporates additional new issue data sets including distribution stats, book sizes, NICs and secondary market performance

IGM/EPFR Weekly Cheat Sheet in Excel

** IGM/EPFR Weekly Cheat Sheet provides proprietary intelligence on Euro primary market trends using various key data points in an easily digestible Excel spreadsheet. This includes Euro new issue volumes, average new issue concessions and book cover ratios across asset classes, as well as EPFR fund flow data and other key credit proxies

Tuesday's potential primary supply

** The Kingdom of Belgium is readying a dual-tranche EUR syndicated transaction comprising a new 7 year OLO82 benchmark maturing 22-Oct-2024 and a new 40 year OLO83 benchmark maturing 22-Jun-2057. This after the borrower mandated BNP Paribas Fortis, HSBC, J.P. Morgan, KBC Bank, Morgan Stanley and SG CIB as joint bookrunners on Monday - see preview here.

** CaixaBank S.A. could pull the trigger on a EUR 10NC5 subordinated T2 trade under the guidance of BofA Merrill Lynch, CaixaBank, Goldman Sachs International and HSBC as Joint Lead Managers and Bookrunners. The deal is expected to be rated Ba2/BB+/BBB-/BBBH by Moody/S&P/Fitch/DBRS

** More EUR covered supply looks to be on the way Tuesday courtesy of Sparebanken Vest Boligkreditt which has hired Barclays, Credit Suisse, Nordea and UniCredit to lead-manage a EUR500m no-grow 7yr prime Norwegian residential mortgage covered bond

** Away from the single currency, the European Investment Bank (EIB), is set to refresh its Dollar Global curve with the issuer taking IoIs for a USD3bn no grow May 2020 line at m/s +14 area guidance via Goldman Sachs, Morgan Stanley and TD Securities. Also targeting the 3yr part of the USD curve is Agence Francaise de Developpement (AFD) which has begun marketing a USD1bn no grow Reg S Feb 2020 issue at m/s +high 20s IPTs via Barclays, BNP Paribas, Deutsche Bank and JP Morgan. See here for more on the two USD deals

Monday's broader market developments

** French political uncertainty pushed the Bund/OAT spread to a fresh multi-year wide following weekend pledge by Le-Pen to exit the Euro and end uncontrolled immigration. BTPs and SPGBs widened even more

** Caution also spread to wider EU risk markets which weakened as the session progressed with Euro under pressure. All sectors of Stoxx600 fell except healthcare

** Data-wise, German Factory Orders smashed estimates with a 5.2% rise in Dec (exp 0.7%, prev -3.6%r) , the biggest monthly rise since Jul 2014. EZ Sentix also beat at 17.4 in Feb (exp 16.8, prev 18.2)

** Draghi reaffirmed commitment to QE provided inflation stays low

** iTraxx Main touched a new wide for 2017 although Crossover respected YTD wide recorded last Thursday at 304.5

Market snapshot (15.40)

EUR/USD -0.45% at 1.0734

SXXP -.0.5% / SX7P -0.97%

GER 2yr -2.6bps at -0.781% / 10yr -4.4bps at 0.375%

FRA 10yr +3.7bps at 1.111%, ITA 10yr +10.6bps 2.356%

Brent -0.83% at USD56.934

iTraxx Main +2.5 at 74.3 / Crossover +5.9 at 298.1

Event risk to watch Tuesday

** Data: UK BRC Sales YoY and Halifax House Prices MoM are both seen a tad softer in Jan, while German Dec Industrial Production is seen marginally weaker

** Events: ECB's Weidmann is the only central bank speaker on the day

** Supply: Watch out for any concession going into auctions from Netherlands (EUR4-6bn 2027 DSLs), Germany (EUR500m 2046 Linkers), Austria (EUR1.43bn 2023 and 2026 RAGBs), the UK (GBP3bn 2019 Gilts) and the US (USD24bn 3yr Notes)

** Earnings: 10 Stoxx600 and 28 S&P500 companies report

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

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