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CREDIT UPDATE
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  • Low dispersion in €IG into the close today, wideners led by normal higher beta REITS HEIBOS & CPI on a +4bp move in belly bunds. Broader €IG is tad tighter helping reverse some of the +2bps of widening we faced WTD on busy primary, falling rates & ~flat to weak equity sentiment.
  • PCF in €HY moved +6.5pts to €84.3. Its nearly +10pts on the week & reports are its is on potential A&E support from a party through equity injection.
  • Bunds end +4 in the belly (short-end driven ~parallel move). ECB delivered a expected 25bp cut but the upward revisions to '24 & '25 core inflation projections, alongside a lack of pre-commitment to future cuts, drove a initial hawkish reaction. While Lagarde did not confirm that the ECB had entered the “dialling back” phase of policy restriction, she did note that there was a “strong likelihood” that this was the case. 35bps of cuts are priced across the remaining 4 meetings this year, down from 40bps yest.
  • Equity vol was low as well, Aroundtown (-6%) the only mover, €IG basket ends +0.3%, RE (-1.1%) only sector mover.
  • $IG looks weak despite only 4 deals (though Energy Transfer & John Deere bringing multi-tranche) - its underperformed 2bps this week (vs. €IG) & now lags our -29bp YTD move by 16bps.
  • Our primary was closed today, it should reopen tomorrow for Barry Callebaut.
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  • Low dispersion in €IG into the close today, wideners led by normal higher beta REITS HEIBOS & CPI on a +4bp move in belly bunds. Broader €IG is tad tighter helping reverse some of the +2bps of widening we faced WTD on busy primary, falling rates & ~flat to weak equity sentiment.
  • PCF in €HY moved +6.5pts to €84.3. Its nearly +10pts on the week & reports are its is on potential A&E support from a party through equity injection.
  • Bunds end +4 in the belly (short-end driven ~parallel move). ECB delivered a expected 25bp cut but the upward revisions to '24 & '25 core inflation projections, alongside a lack of pre-commitment to future cuts, drove a initial hawkish reaction. While Lagarde did not confirm that the ECB had entered the “dialling back” phase of policy restriction, she did note that there was a “strong likelihood” that this was the case. 35bps of cuts are priced across the remaining 4 meetings this year, down from 40bps yest.
  • Equity vol was low as well, Aroundtown (-6%) the only mover, €IG basket ends +0.3%, RE (-1.1%) only sector mover.
  • $IG looks weak despite only 4 deals (though Energy Transfer & John Deere bringing multi-tranche) - its underperformed 2bps this week (vs. €IG) & now lags our -29bp YTD move by 16bps.
  • Our primary was closed today, it should reopen tomorrow for Barry Callebaut.