** Another EUR6.75bn of IG Euro paper printed on Thursday with all asset classes once again represented. taking the weekly total up to EUR29.675bn, the busiest week since w/e 27-January. For a breakdown of Thursday's Euro deals see IGM DAILY EUR NICS & BOOKS
** In FIG, a trio of borrowers issued EUR deals spanning sub and senior format with the former sparking the most enthusiastic response suggesting that investors see better risk reward in higher beta product compared to the lower beta senior market. This was exhibited by the blowout EUR5.25bn book size for Bankia's EUR500m 10NC5 Tier 2 sub issue which was ramped in 40bps from IPTs to a final m/s +335 re-offer. In contrast, much like ASB Finance on Wednesday, SpareBank 1 SMN received a rather more tepid response for its EUR500m 5yr senior line which priced at m/s +42 from +low 40s IPTs on the back of demand over EUR500m. For more see IGM's FIG SNAPSHOT
** SSE brought a rare dual-currency 2-tranche RegS Hybrid issue consisting USD900m 60.5NC5.5 & GBP300m 60.5NC5.5 tranches which attracted demand in excess of USD5.5bn and GBP2bn respectively. Elsewhere, Orange's EUR1.25bn two-part 6.5yr/10.5yr deal brought IG EUR corporate issuance up to EUR12.8bn for the week, the largest weekly total so far this year. For more see the IGM CORP SNAPSHOT
** OP Mortgage Bank kept covered supply ticking over with a EUR1bn 7yr mortgage backed bond which landed at m/s -4 from a m/s flat area guidance starting point on the back of books well over EUR2bn (excluding JLM interest). This equated to a final NIC of around 4.5bps. See IGM COVERED SNAPSHOT for more
** Slovak Republic was the sole SSA visitor to the Euro market with a EUR2bn 20yr line which priced at m/s +68 (from +75 area IPTs) with final demand pegged around EUR3.2bn. See earlier IGM PREVIEW here
** In the dollar market, Swedish Export Credit Corporation (SEK) tapped the 5yr part of the Global curve for USD1.4bn at m/s +30. Demand of over USD2.2bn allowed the issuer to squeeze in pricing from IPTs at m/s +33 area
Friday's potential EUR supply
** NRW.Bank is readying a EUR500m 8yr fixed-rate issue after mandating DekaBank, J.P. Morgan and UniCredit to lead the deal on Thursday afternoon
** FMS Wertmanagement is working a USD1bn no grow 2yr line at m/s -3 area IPTs via BNP Paribas, Deutsche Bank, JP Morgan and RBC
** Driven by data and the latest runes from the U.S. Fed, opinions are changing regarding the timing of the next U.S. interest rate move (sooner rather than later is now the thing, with March as forerunner). Yesterday's more statesman-like address to Congress by Pres. Trump further engendered the positive narrative as evidenced by market reaction. In this report, IFI Chief Macro Strategist David Ader looks at how we got here, and are we right?
Broader market developments on Thursday
** EU equities flounder on either side of parity, failing to make headway in either direction. Nevertheless, that still saw both Stoxx600 and the FTSE100 post marginal new 2017 highs
** DXY on course to post highest close since 6th Jan 2017, having stretched Thursday's gain as market probability of a Fed rate hike in March more than doubles to 88% from 40% Monday. GBP/USD sinks to 6-week low
** Govvies � OATs and SPGBs underperform in run up to supply, but pare worst losses thereafter. 10yr OAT/Bund yield spread narrows below 60bp for the first time since end of January. German curve bear steepens. Gilts ultimately join the bandwagon of higher EGB yields, having bucked the rising trend in early trade
** Eurozone CPI matched expectations, but pipeline inflation pressure builds with PPI YoY slightly stronger than anticipated. EZ Unemployment steady as expected.
** Brent currently on course to end lower on the week, having erased Wednesday's 1.39|% gain at the time of writing
** iTraxx indices start wider then tighten. Main touches Jan 26th tight, while Crossover hits tightest level since July 2015. See CHART WATCH
Market snapshot (15.08 GMT)
SXXP +0.06% / SX7P +0.17%
DXY +0.36% at 102.150
GBP/USD -0.35% at 1.2276
GER 2yr -0.89bp at -0.857% / 10yr +3.5bps at 0.313%
Brent -1.33% at USD55.61
iTraxx Main -1.3 at 70.0 / Crossover -5.8 at 277.3
What to watch Friday
** Data: It's Services PMI day in Europe, while Germany and the Eurozone both report Jan Retail Sales figures (both f/c to rebound) and Italy final Q4 GDP. Across the pond, watching US ISM Non-Mfg Composite and final Markit Services PMI
** Events: Focus on Fed's Yellen as she speaks on the economic outlook, following hot on the heels of her colleagues Mester (00.00), Evans (15.15), Powell (17.15) and Fischer (17.30) who are all scheduled to speak earlier in the day. Markets currently ascribe an 88% probability of a Fed rate hike this month
** Supply: There are no significant term bond auctions scheduled in Europe or US
** Earnings trickle down to 6 Stoxx600 companies and just 1 S&P500 firm
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