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CREDIT UPDATE

iTraxx closed +0.7/+1.8 wider, belly rates +4 on hawkish comments from ECB's Schnabel that seemed to have trumped weaker Industrial production for Germany - though latter was backward looking/for Dec.

€IG skewed slightly wider, financials look to be a drag (Aareal, DB, Commerzbank) alongside earnings linked VF widening & Bayer's continued re-pricing (though mids have come in from midday). Ford 4-6 tighter post-earnings, broader IG auto curves mixed.

Similar story in equities, €IG basket -0.6% lower, underperforming on Financials (-0.9%) with only green in Auto's & Tech. Biggest Movers were Emerson Electric (+11%) on strong earnings (A2, A) with little pass through to cash credit, while VF equities (-13%) faired better than local credit.

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