skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

** It was another robust session for the Euro primary market on Wednesday where a total of EUR13.425bn of paper priced in the single currency courtesy of 13 separate tranches. For the breakdown of the day's supply see IGM's DAILY EUR NICS & BOOKS

** The SSA sector again saw the biggest deal of the day where European Financial Stability Facility printed a EUR6bn May 2033 line at m/s +7 having squeezed pricing in from m/s +9 area guidance on demand in excess of EUR10.8bn. That's the largest EFSF deal since the borrower raised EUR8bn 1.25% Jan 2019s back in 2014. For more on this and a USD3.5bn two-part dollar trade from EIB, see IGM SSA PREVIEW

** Corporates remained extremely busy where IG supply totalled EUR5.1bn via 7 separate tranches binging total supply for the asset class up to EUR15.2bn, marking the busiest week YTD for the asset class after just 3 days of activity, surpassing the EUR12.9bn which priced last week. Wednesday's supply was spearheaded by an equally-weighted EUR2.5bn 8/12yr 2-parter from US borrower Apple whilst there was also deals from Merlin Properties, Mylan, Unibail-Rodamco, Bertelsmann and high-yield rated K+S. For more on all of these including RV analysis see IGM's CORP SNAPSHOT

** In FIG, the focus remained on senior where Commerzbank AG sold its first fixed deal since September (EUR500m 7yr) and KBC Group NV opted for a floating format (EUR750m Nov 2022). The deals attracted combined demand of ~EUR2.35bn while compressing by 15 and 10bps respectively during execution although the former widened 3bps on the break. Higher beta paper underperformed in secondary, reflecting a combination of recent supply and also a weaker risk tone stemming from deepening political problems for President Trump. See IGM's FIG SNAPSHOT

Thursday's potential primary supply

** Republic of Lithuania (A3/A-/A-) mandated BNP Paribas and J.P. Morgan to lead manage a new dual-tranche EUR Reg S benchmark offering in registered form across 10-year and 20-year tranches. See IGM Preview here


Wednesday's broader market developments

** EU risk assets declined Wednesday, taking their cue from Asian and US markets amid potential heightened risk to US President Trump's economic agenda after latest media reports suggested he had asked ex-FBI Director Comey to drop an investigation into one of his close aides. Stoxx600 hit a 1 � week low while VIX surged over 20%

** Brent started lower following Tuesday's API build before bouncing back ahead of Wednesday's API data

** Govvies - core curves marginally bull flatten, PGBs lead periphery outperformance. Germany allotted EUR812m versus EUR1bn target via 2046 Bund sale

** iTraxx indices widen with Main hitting widest level of the week

Market snapshot (14.48 BST)

SXXP -0.65% / SX7P -1.31%

GER 2yr -2.5bps at -0.696% / 10yr -4.5bps at 0.386%

Brent +1.10% at USD52.22

iTraxx Main +1.3 at 63.3 / Crossover +4.9 at 254.4


What to watch Thursday

** Data: Spotlight on UK Retail Sales (est 1.1% MoM including auto fuel, prev -1.8%), while France reports its Q1 Unemployment Rate. Across the pond, there are no top tier US releases.

** Events: A handful of ECB speakers take to the stage on Thursday in the shape of Weidmann (08.00), Mersch (08.50/13.30), Lautenschlaeger (13.45), Nowotny (13.50) and Draghi (18.00). Also watching ECB monetary policy meeting minutes, while across the pond Fed's Mester speaks after EU hours (18.15 BST)

** Supply: A chunky EUR4-5bn to absorb from Spain via 2020, 2024, 2026 and 2027 bond auctions, while France plans to raise EUR6.5-7.5bn via 2020 and 2022 OATs and EUR1.5-2bn via OAT Linkers with maturities ranging from 2028 to 2047

** Earnings see 15 Stoxx600 and 8 S&P500 companies report on the day


SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline


Recommended Articles

  • IGM Credit, IGM FX and Rates

    China Insight: More Small Banks in Trouble as Re-leveraging Underway

    By Tim Cheung 19 Nov 2019

    The health of China's smaller banks has come under pressure as Yichuan Rural Commercial Bank and Yingkou Coastal bank are said to have suffered bank runs in recent weeks amid fears over poor management and liquidity issues. Earlier this year, a rare government takeover of Baoshang Bank and a state rescue of Jinzhou Bank and Hengfeng Bank raised concerns about the underlying health of hundreds of small banks in China. Admittedly, China has entered another round of re-leveraging, albeit a softer one this time. With the fundamental issue of macro leverage unsolved, we expect China's debt-to-GDP ratio, currently in the 290-300% area, to reach 320% by 2025 (chart 1).  

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    The Context 11.18.19

    18 Nov 2019

    Inside this week’s edition of The Context, Financial Intelligence thought leaders discuss: Brl/Mxn Corrects Lower, But Still See Mxn Underperformance in Medium-term Due to Mexico's challenging GDP growth outlook, the reduction of the real rate and lingering risk of credit rating downgrades, we still see scope for Mxn underperformance in the medium-term. Whilst the Brl rally has paused, and for good reason, the arguments we presented for Brazilian economic outperformance remain. Euro Corp Comment: Issuance Slows But it Remains a Seller’s Market It was another active week for the European corporate bond market where another EUR7.455bn printed in the single currency courtesy of eleven issuers (13 tranches). Whilst being a decent total, it did however mark a considerable slowdown from the jumbo EUR11.25bn that hit the tape the week prior. What remained constant though was that there remained plenty of cash directed toward new corporate offerings… The CAD Week - Bias is Neutral to Bearish We get some major releases this week out of Canada, with manufacturing sales, CPI and retail sales being released on Tue, Wed and Fri respectively, but ultimately the most influential topic for the BoC is the ongoing trade war and its effect on domestic industry. Read more from The Context and subscribe to have it delivered to your inbox each week!

    Topics Industry News

  • IGM Credit

    Asia Bond Barometer: Riskier categories still favoured

    14 Nov 2019

    Asia Bond Barometer: Riskier categories still favoured

;

Any questions? Speak to a specialist

Would you like to request sample data or analysis from Informa Financial Intelligence? 

See how our tailored solutions can help you gain a competitive advantage: