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Tuesday's primary market highlights

** It was a subdued session in the primary market on Tuesday where just EUR2.75bn printed in the single currency on the back of total investor demand topping EUR6.65bn. This comes despite this week's issuance window likely being limited to just Tuesday and Wednesday following the Whit Monday Holiday (which saw an issuance blank) and looming event risk in the form of Thursday's UK Elections and ECB meeting. For the breakdown of Tuesday's EUR paper including pricing steps and NICs, see IGM's DAILY EUR NICS & BOOKS

** In FIG, Sumitomo Mitsui Financial Group brought a EUR1.25bn two-part comprising a EUR750m 5yr floater at 3mE +45 and a EUR500m 10yr fixed rate note at m/s +65. Books of over EUR1.6bn and EUR1.3bn respectively allowed both tranches to be tightened 15bps from IPTs to reoffer. See IGM FIG SNAPSHOT for more insight including relative value analysis

** HeidelbergCement made its third visit to the single currency this year with a well-received EUR500m no grow 10yr which landed at m/s +85 from +105 area IPTs on the back of demand topping EUR1.75bn. There was also a rare unrated Eurodollar issue from Louis Dreyfus which brought a USD300m 6yr at 5.25% with books last seen over USD2.4bn. For more on this duo see IGM's CORP SNAPSHOT

** Covered supply drew a second consecutive blank on Tuesday but Berlin Hyp (BHH) announced the size and tenor for its Green Pfandbrief which is expected as soon as Wednesday, while BNZ International (London branch) mandated leads for a roadshow starting on 19th June ahead of a covered and/or senior unsecured foray. For more on the covered pipeline and a look at our secondary market performance tracker of recent covered deals see the IGM COVERED SNAPSHOT

** ECB data showed purchases via the CSPP as of 2nd June 2017 totalled EUR90.706bn, pointing to an implied monthly purchase rate of EUR7.47bn which is down slightly from EUR7.49bn the previous week. For more see IGM's ECB CSPP REVIEW

Wednesday's primary prospects

** The Republic of Italy (Baa2/BBB-/BBB/BBBH) is preparing a new Mar 2048 transaction via leads BNP Paribas, Citi, Goldman Sachs, HSBC and UniCredit. All other specialists will be invited as co-lead managers. See preview here

** Province of Ontario (Aa2/A+/AA-) is taking IoIs for a EUR 7yr benchmark at m/s +mid/high single digits IPTs via BNP Paribas, BofA Merill Lynch, Deutsche Bank, and RBC Capital Markets. Preview here

** Bpifrance Financement (Aa2/AA) is working a EUR Nov 2022 bmk at interpolated OATs +20 area IPTs. Credit Agricole CIB, Deutsche Bank, Goldman Sachs, Morgan Stanley and Natixis are leads on this one

** EAA - Erste Abwicklungsanstalt, rated Aa1/AA-/AAA, is readying a EUR 3yr benchmark via Barclays, BofA Merrill Lynch, DekaBank, DZ BANK and HSBC

** ESM, the European Stability Mechanism (Aa1/AAA) is set to tap its outstanding EUR3.5bn 1.8% Nov 2046 bond via Deutsche Bank, Morgan Stanley and Natixis

** Berlin Hyp AG (BHH) is expected to pull the trigger on a EUR500m Oct 2023 Green Covered via Commerzbank, Credit Agricole CIB, J.P. Morgan, LBBW and UniCredit after recently holding a roadshow. The instrument is expected to be rated Aaa by Moody's

** American International Group Inc (Baa1/BBB+) held a roadshow last week via Barclays, BNP Paribas, Citi and HSBC and could pull the trigger on a SEC-Registered 10yr senior line which would , according to IGM's database, mark the longest outstanding senior deal in the single currency from a US insurer

** In dollars, KfW (Aaa/AAA/AAA) is taking IoIs for a new USD1bn no grow Dec 2018 issue at m/s -7 area IPTs via BofAML, BMO and Commerzbank

Tuesday's broader market developments

** European risk assets traded defensively in the run up to Thursday's risk events in the shape of the UK election, ECB policy announcement and the former US FBI Director Comey's testimony to Congress. DAX plays catch up after Whit Monday holiday

** Brent on course for third straight day of decline, while Gold receives safe-haven bid, hitting a 7-week high

** Government bonds, that were already heading higher on FTQ bid, got an extra lift from BN story suggesting China is preparing to increase its holdings of USTs. 10yr UST yields hit a fresh 7-month low at 2.127%. 10-30s SPGB curve bull flattens, PGBs unwind AM euphoria and resume recent yield rise pushing the 10yr spread vs Bunds out to a one-week wide

** iTraxx indices are little changed and off their intra-day wides, after Main takes out last week's wide earlier. CHART WATCH suggests iTraxx Crossover set to go tighter after a breather?

Market snapshot (14.58 BST)

SXXP -0.77% / SX7P -0.67%

GER 2yr -1.6bps at -0.738% / 10yr -2.1bps at 0.264%

Brent -0.51% at USD49.22

iTraxx Main +0.1 at 62.7 / Crossover +0.4 at 250.0

What to watch Wednesday

** Data: Light agenda sees German Factory Orders headline European releases (est -0.3% MoM, prev +1.0%). Spanish April Industrial Production is expected to rebound to 0.4% from -0.4%, and Italian Retail Sales are seen firmer. UK Halifax House Prices are also out, while across the pond the calendar is devoid of any top tier releases

** Events: There are no central bank speakers scheduled on the day. Watching OECD Economic outlook for indications on the Eurozone recovery

** Supply: Germany to sell EUR3bn 2022 OBLs

SSA Priced / SSA Pipeline

CORP Priced / CORP Pipeline

FIG + Covered Priced / FIG + Covered Pipeline

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