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CDX Opens Tighter Despite Weak Local Credit Sentiment

CREDIT PRE-MARKET

€IG is skewed firmly wider today. €IG equity eqv's are down -0.3% nearly all of that drag coming from financials - BNP is contributing more than half of that on earnings that missed on profits, had higher credit losses & lower capital ratios (see above). In cash credit seeing weakness broad based in bank & auto (VW, Merc) curves. Bayer's curve continuing to sell-off (another +4-10bps today).

iTraxx was bucking the sentiment moving tighter (-0.5/-2) & should be helped by CDX opening -1/-5 tighter. Gilts selling-off (2s +5) on some hawkish elements from BOE meet vs. consensus but more in line with what our analyst were looking for (see above). Little flow-through to US or Euro rates (+1-2). S&P futures +0.4%.

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