FREELAND: CANADA WON'T ESCALATE OR BACK DOWN ON US TRADE FIGHT

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI: PBOC To Aim To Drive Inflation Higher- Advisors

MNI: China To Issue More Bonds As Stimulus Targets Consumption

MNI BRIEF: China Nov M1 Decline Narrows, M2 Slows

EZ/UK T-Bill Calendar: 8/13/28/50-Week BTF Auction on Monday

EZ/UK Bond Supply Calendar: 4.125% Jul-29 Gilt Due on Tuesday

MNI: CANADA OCT WHOLESALE SALES +3.3%; EX-AUTOS +0.5%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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CREDIT UPDATE
  • €IG is skewed tighter led by high-beta RE CPI (-3-7), BNP (unch to -6), Mizuho (-2-5). Sporadic widening in some financial lines but nothing curve wide. OAT spreads +3bps, BTP +4.6bps & local swap spreads +1bp.
  • First OAT issuance since French election announcement due tomorrow, our rates team note will be a litmus test but adds auction size range is smallest since Aug '23 (for MT lines) at €8.0-10.5bln. Our primary saw tad more life with 3 IG issuers, HY in particular moving at pace and looking past last week's spread widening.
  • 1pt+ gains in €HY from Victoria 26/29s (+1.9/+1.6pts) (earnings came in the mng), KEMONE28s (+1.9pts), Tele Columbus 29s (+1.7pts), Maxeda 26s (+1pt) and Atos 28s (+1pt).
  • 5yr Bunds finish unch, gilts +2bps after hot May services CPI print. Our analyst takeaway was "cements a 7-2 vote at tomorrow's meeting with rates unchanged...not enough of a shift to move Ramsden back to voting for an unchanged Bank Rate (and almost certainly not for Dhingra) and we don't think there are any MPC members seriously considering voting for a hike here either. Note that services CPI was 0.42ppt above the May MPR forecast but headline CPI was only 0.05ppt above."
  • €IG equities basket ends -0.1%, all sectors sub<1%, losses led by RE (-0.8%), financials flat. Single name movers was Sartorius (-13%) (spoke at Citi conference, hard to pinpoint news still), & Neste Oyj (-6%) (pre-silent period CFO call). Sartorius (BBB) curve has moved unch to +3 this afternoon, Neste (A3) unch.
  • US will return from holidays tomorrow. Outstanding mandates in our market include Otto (unrated logistics co), International Workplace in RE (BBB), DCC Group in Energy (BBB) & Q-park in Transport (Ba3/BB-).
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