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Tuesday's primary market highlights

** EUR3.45bn printed in the IG EUR primary market on Tuesday with the corporate market once again leading the way, accounting for EUR2.95bn (85.5%) of this total. For the full list of Tuesday's EUR issues, see the IGM DAILY EUR NICS & BOOKS Report

** Arguably the most interesting deal of the day came courtesy of Swedish-headquartered Telia Company AB which issued a dual-currency EUR/SEK 3-part hybrid transaction. The EUR900m 61yr non-call Apr 2023 line which made up part of the transaction marked the first Hybrid benchmark in the single currency since November 2016. Strong demand of ~EUR3.4bn allowed the borrower to tighten pricing into a final yield of 3% from 3.375% area IPTs which meant the trade printed broadly flat to fair value. See CORP PREVIEW: Telia kick-starts EUR hybrid supply for more

** Telia was joined on the day by fellow corporates Gas Natural, FCE Bank and Kering which issued a combined EUR2.05bn, bringing total weekly volume for the asset class up to EUR7.8bn already. For an in depth look at Tuesday's corp deals as well as a recap of the trades to price Monday, see IGM's CORP SNAPSHOT

** HYPO NOE Gruppe Bank AG brought the first covered deal of the week via a EUR500m Apr 2023 public-sector backed issue which landed at m/s +5 from a +8 area starting point on the back of books topping EUR1.4bn. This represented an economic outcome for HYPO NOE with the final NIC standing at just 1.5bps. See IGM COVERED SNAPSHOT

** FIG supply in the single currency remained dormant for a second day but Q1 volumes were still on course to top those seen in Q1 2016. For more see IGM's FIG SNAPSHOT

** Away from the single currency, Export Development Canada (EDC) visited the Dollar market with a USD500m no grow Apr 2019 transaction. The issuer appeared to find the going tough though with the deal only printing in line with area IPTs at m/s -7 and books last communicated as over USD475m


Wednesday's potential supply

** The Kingdom of Sweden (Aaa/AAA/AAA) is taking IoIs for a new USD 3yr benchmark issue at m/s -5 area (~CT3+22.7) IPTs via Barclays, Citi and NatWest. See preview here

** Autonomous Community of Madrid (Baa2/BBB+/BBB) may pull the trigger on a debut EUR 5yr Sustainable Bond after mandating Barclays, BBVA, Credit Agricole CIB, ING and Natixis on Tuesday afternoon.


** The Cities of Essen, Gelsenkirchen, Remscheid and Solingen, located in the State of North Rhine-Westphalia (NRW), have mandated DekaBank, HSBC and UniCredit to act as joint lead managers for a EUR250mn (no-grow) 10yr fixed rate bond transaction (Staedteanleihe No. 5)

** The Federal State of Lower-Saxony (Land Niedersachsen), rated AAA by Fitch, is preparing to tap its existing EUR 0% Mar 2021 Landesschatzanweisung (LSA) via Goldman Sachs International, NORD/LB and UniCredit


Broader market developments on Tuesday

** EU risk assets directionless amid ongoing uncertainty over US President Trump's pro-growth measures. Portugal's PSI20 outperforms, briefly hitting a 9-month high. Latter led higher by surge in EDP shares after it announced the disposal of its Spanish Naturgas unit

** Data-wise - US March Conference Board Consumer Confidence tops estimates to hit its highest level since Dec 2000, while the Richmond Fed Manufacturing Index also beats, posting a 13-year high

** Brent touches a one-week high and is currently on course to wipe out Monday's 0.10% decline

** Govvies - Gilts underperform their core counterparts ahead of Wednesday when UK PM May is expected to officially trigger Article 50 and commence the 2-year Brexit negotiations. Markets ignore technically uncovered Schatz auction (real bid-to-cover 0.8). 10yr peripheral yields little changed at the time of writing

** iTraxx indices tighten. Main posts a new series tight having broken below last Tuesday's 74.023 level


Market snapshot (15.22 GMT)

SXXP +0.23% / SX7P +0.74%

GER 2yr +0.2bps at -0.720% / 10yr -1.2bps at 0.385%

Brent +1.0% at USD 51.26

iTraxx Main -0.8 at 74.3 / Crossover -3.1 at 292.0


What to watch Wednesday

** Data: Sentiment surveys are out in France and Italy, before UK reports latest Mortgage Approvals

** Events: Watching ECB's Praet, and Fed's Evans, Rosengren and Williams for any fresh direction on policy

** Supply: US to sell USD13bn 2yr FRNs and USD28bn 7-yr Notes


SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline


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