EU Close

* €IG cash continues to defy some cross-asset correlations, reversing from a firm skew wider in the morning to unch on a -10bp rally in belly rates this afternoon.

* That move was again not reflected in broader risk assets; Stoxx traded through the rates rally & is unch on the day, our €IG basket is +0.1% & $IG morning prints are mixed. The move also defies some of the yields/rates supporting spread theories - particularly on a day where primary stayed active and crossed above weekly expectations (c€19b).

* Risk-off sentiment is taking hold in US equities and being passed through to CDX this afternoon - its bringing Main back towards unch levels, iTraxx HY still -2 tighter.

* The rates rally this afternoon was despite slightly higher US Jan PCE (Core 0.416% vs. c0.4% MoM) & the strongest core ex-housing print since Dec '21 at 0.596%, though some downward revisions to Dec. Rally did get support from claims including in continuing (reference week for next weeks NFP) at 1905k (c1875k).

* There was firmer support for the rally later in MNI's Chicago PMI & home sales that were below consensus. Moves also looking past local inflation that was touch higher than consensus.

Single Name Notes; CRH, VTRS, BAYNGR, GRFSM, BIRKEN, SWEDA, IGBOND, VOD, BATSLN, PM, ENGIFP, TD, ABIBB, AFFP, AKEFP, COVEGR, BPCEGP, LSELN, ATDBCN, VIEFP, ADEBNO, AARB, ERSTEI, SESGFP, UNIMUS.