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CREDIT UPDATE
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  • €IG is skewed firmly wider led by the normal high beta RE names but was also joined by Autos (VW, Ford, BMW). Tighteners are Thames Water (reversing yesterday's widening) and Rolls Royce on earnings.
  • Movers in HY were PFLEID 26s (+3.5pts), WBA26s (+0.7pts) continuing a run in from wides and Auchan (-1.3pts) on a S&P downgrade.
  • iTraxx has had a very weak session at +4.2/+15 - we hear exacerbated by technicals. CDS is starting to come in this afternoon.
  • The risk-off did hit equities; €IG ends -1.7% vs. SXXP -1.2% and SPX -0.9%. Financials -3%, consumer cyclicals -2.6%, Industrials -2.4% and IT -1.3% led the losses. Single name movers were Worldline (-15%), Syensqo (-10%), SocGen (-9%), APD (+11%), Aptiv (+7%) and Rolls-Royce (+7%).
  • Most of the move in risk assets came after the US ISMs where the weak employment figure was in focus. Our economist noted the "43.4 (cons 49.2) after 49.3 was the lowest since Jul 2020. Pre-pandemic, that’s the lowest since 2009 although manufacturing does admittedly have a small share of payrolls at about 10%"
  • Sentiment was helped by the BOE cutting rates by 25bps to 5% - market pricing was torn heading in. All eyes on tomorrows US July Payrolls print.
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  • €IG is skewed firmly wider led by the normal high beta RE names but was also joined by Autos (VW, Ford, BMW). Tighteners are Thames Water (reversing yesterday's widening) and Rolls Royce on earnings.
  • Movers in HY were PFLEID 26s (+3.5pts), WBA26s (+0.7pts) continuing a run in from wides and Auchan (-1.3pts) on a S&P downgrade.
  • iTraxx has had a very weak session at +4.2/+15 - we hear exacerbated by technicals. CDS is starting to come in this afternoon.
  • The risk-off did hit equities; €IG ends -1.7% vs. SXXP -1.2% and SPX -0.9%. Financials -3%, consumer cyclicals -2.6%, Industrials -2.4% and IT -1.3% led the losses. Single name movers were Worldline (-15%), Syensqo (-10%), SocGen (-9%), APD (+11%), Aptiv (+7%) and Rolls-Royce (+7%).
  • Most of the move in risk assets came after the US ISMs where the weak employment figure was in focus. Our economist noted the "43.4 (cons 49.2) after 49.3 was the lowest since Jul 2020. Pre-pandemic, that’s the lowest since 2009 although manufacturing does admittedly have a small share of payrolls at about 10%"
  • Sentiment was helped by the BOE cutting rates by 25bps to 5% - market pricing was torn heading in. All eyes on tomorrows US July Payrolls print.