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Wednesday's primary highlights

** Primary Euro supply totaled EUR11.05bn on the first day of the new month with all asset classes represented. This was up from EUR7.625bn on Tuesday and brings the weekly IG issuance total in the single currency up to an impressive EUR22.925bn, with corporate accounting for 50.38% of this total (more on corps below). For the full list of EUR deals to print Wednesday see IGM's DAILY EUR NICS & BOOKS

** European Investment Bank (EIB) spearheaded supply with a EUR5bn Oct 2024 EARN which landed at m/s -13 from a -11 area starting point with books in excess of EUR9.5bn. This pointed to a final NIC of circa 3.5bp. See earlier IGM SSA PREVIEW for more

** FIG supply stepped up a gear on Wednesday thanks largely to a brace of benchmark issues from RBS and ASB Finance Limited which received a rather mixed reception from investors. Meanwhile, the pipeline is shaping up nicely with another trio of issuers announcing their near-term funding plans on the day. For more details see the earlier IGM FIG COMMENT

** The fast pace of the corporate primary market continued where RCI Banque priced a EUR1.4bn 2-part fixed/floating rate issue whilst Air Liquide issued a EUR600m 10yr line with combined demand for the three tranches standing at EUR5.3bn+. Wednesday's deals bring the total weekly IG corp issuance in the single currency up to EUR11.55bn which marks the busiest week this year for the asset class after just 3 days. See IGM CORP SNAPSHOT for relative value analysis of Wednesday's deals

** DG Hyp printed the first EUR covered deal of the week, with the EUR500m no grow Sep-2026 Hypothekenpfandbrief eventually pricing at m/s -11, which equated to a NIC of around 3bps. The reoffer was tweaked from initial m/s -7 area guidance on the back of demand over EUR1bn (post-rec). For more see IGM's COVERED SNAPSHOT

Thursday's potential primary supply

** SpareBank 1 SMN (A1/A-) and ING Groep (Baa1/A-/A+) are set to go head-to-head at the 5yr part of the Euro senior, unsecured curve. The former is readying a new EUR500m no grow Mar 2022 line via DZ Bank, NatWest Markets, Nordea and UniCredit, whilst ING mandated CA CIB, Credit Suisse, Deutsche Bank, ING and Natixis as joint bookrunners for its own EUR 5yr deal

** Bankia is ready to offer a test of sentiment for Spanish subordinated supply with the issuer having mandated Bankia, Credit Suisse, Goldman Sachs, JP Morgan and Morgan Stanley as joint bookrunners for a EUR500m (no grow) 10NC5 Tier 2 issue

** The Slovak Republic (A2/A+/A+) could pull the trigger on a EUR denominated benchmark with the issuer reportedly eyeing a 20yr maturity. Deutsche Bank, HSBC, SG CIB and Tatra Banka (Raiffeisen Bank International Group) are leads on the deal. See earlier IGM PREVIEW for more

** Away from the single currency, Swedish Export Credit Corporation (SEK), rated Aa1/AA+ and 100% owned by the Kingdom of Sweden, is taking IoIs for a new USD 5yr Global line at m/s +33 area IPTs

Broader market developments on Wednesday

** EU risk assets bounced on hawkish Fed rhetoric, which pushed Fed rate hike bets for March to 82% from 40% on Monday

UK's FTSE100 carved out an all-time record high as GBP sank on UK's Mfg PMI miss. France's CAC40 touched its highest level since early Dec 2015

** USD got a lift versus all major currencies; DXY spot rate hit its highest level since 11th Jan

** German EU Harmonised inflation posted highest YoY increase since Aug 2012, at 2.2% and above the ECB's just below 2% inflation target, posing upside risk for Thursday's pan-EZ CPI (est 2.0% YoY, prev 1.8%)

** US data saw Jan Consumer Spending rise 0.2% and income gain 0.4% (both exp at 0.3%), while the ISM Mfg index beat, hitting its highest level since Aug 2014, at 57.7 (exp 56.2). Markit's Mfg missed however, while the PCE deflator outturn rose to 1.9% from 1.6% but missed the 2% median estimate

** Govvies - EGBs got dragged lower pushing 10yr yields higher across the board by 3.3-8.3bps amid risk on in equities. French, German and Spanish curves bear steepened. 10yr OAT/Bund yield spread tightened to narrowest level in almost one month

** Brent pares best gains as EIA Crude inventories climbed 1.5m brls to 520.2m brls, but oil still on course to end 3 consecutive days of losses

** iTraxx indices tighten from the get go. Main and Crossover touch tightest levels since 27th and 4th Jan respectively

Market snapshot (15.53 GMT)

SXXP +1.43% / SX7P +3.14%, having hit a one-week intra-day high

DXY +0.59% at 101.720

GBP/USD -0.83% at 1.2314

GER 2yr +6.6bps at -0.845% / 10yr +8.5bps at 0.288% / 30yr +9.5bps 1.081%

10yr OAT/BUND yield spread -3.6 at 63.8bp

Brent +1.98% at USD56.69, on course to end 3 straight days of losses

iTraxx Main -2.0 at 71.1 / Crossover -10.7 at 281.8

What to watch Thursday

** Data: Eurozone Unemployment, PPI and CPI form key European highlights, with focus on the latter after German CPI rose by more than expected in Feb posing upside risk to the pan Eurozone version. Spain reports final Q4 GDP and Feb unemployment figures, while UK releases Feb Markit/CIPS Construction PMI

** Events: ECB's Lautenschlaeger is the only central banker scheduled to speak on the day

** Supply: Spain intends to auction EUR3-4bn 2022, 2027 SPGBs and EUR0.5-1bn 2021 Linkers, France EUR6-7bn 2026, 2036 and 2066 OATs, while the UK offers GBP2.5bn 2022 Gilts

** Earnings: 20 Stoxx600 and 4 S&P500 companies report

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

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