** Primary activity slowed significantly on Thursday where only EUR500m of paper printed (via 2 deals) in the single currency compared to EUR13.425bn on Wednesday.
** Despite the modest primary session on Thursday, supply for the week still totals EUR40.005bn, just shy of the EUR41.95bn which priced last week
** The corporate sector was represented by unrated Finnish chemicals company Kemira Oyj which brought a EUR200m no grow 7yr line at m/s +140 having tightened pricing by 20-25bps from IPTs of m/s +160/165 on the back of demand over EUR550m. This resulted in a final NIC of around 10bps. Meanwhile, Wednesday's batch of corp deals struggled in the secondary market. For more see IGM's CORP SNAPSHOT
** In FIG, no fresh IG supply emerged but American International Group Inc. lined up a new senior benchmark to follow investor meetings commencing 30th May. That left the weekly tally at EUR5.9bn, less than half the EUR11.9bn printed the week prior. Higher beta and subordinated paper bore the brunt of spread widening resulting from deepening political turmoil surrounding the Trump presidency. See IGM's FIG SNAPSHOT
Friday'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
Thursday's broader market developments
** Sellers of risk were in control for the first half. Trump jitters were amplified by a Reuters report claiming the Trump team had contact with the Russian officials during 2016 campaign. Buyers stepped back in during PM trade though
** Economic news was positive but struggled to exert an impact where French unemployment dropped to the lowest level since 2012, UK retail sales grew by double the rate expected, US Jobless Claims dropped to 232k (from 236k) and the Philly Fed Index jumped to 38.8 (from 22.0)
** 10yr bund yields touched lowest level in over two weeks as haven demand rose
Market snapshot (15.55 BST)
SXXP -0.42% / SX7P -0.23
GER 2yr -1.0bps at -0.71% / 10yr -2.6bps at 0.348%
Brent +0.63% at USD52.54
iTraxx Main +1.3 at 65.0 / Crossover +4.2 at 260.4
What to watch Friday
** Data: German PPI, UK CBI trends and Eurozone Consumer Confidence are the main highlights but are unlikely to move markets which will be more preoccupied with P&L preservation into the weekend given the deepening political crisis enveloping President Trump
** Events: 2 ECB and 2 Fed speakers are on tap. The latter may provide guidance as to whether markets are right to downgrade the probability of a hike in June (currently 86% via BBG WIRP)
** Supply: No term auctions are scheduled in Europe or US for Friday 19th May
** Earnings are light with just 2 Stoxx600 and 3 S&P500 companies report as the current cycle moves further toward a conclusion which is now more than 95% and 92% complete respectively
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