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EU Credit Morning Wrap: Macro Setting The Tone

CREDIT UPDATE
  • Rates opened sharply higher (as did gilts) on yesterday's US moves and got support from local final March PMIs (EU: 46.1, est. 45.7). Reaction to German state CPI data had mixed read-through (rates initially rallying on it before paring back gains) - national German CPI prints at 1300 Lon/0800 ET - our Economist sees the non-HICP national print at +0.4% m/m and 2.2% y/y (c0.5% & 2.2%).
  • Main/XO are marginally wider (+0.1/+2.4) whereas cash bonds are broadly flat (IG -0.1, HY 0.0). Corporate news is relatively light; Aroundtown is tendering for some EUR perps, BBG indices have rebalanced this morning, including Rolls-Royce and Cellnex both into IG.
  • Equities are enjoying a positive start to Q2; SXXP +0.2%, UKX +0.4% and latter flirting with the 8,000 level. SSAB is down c.5% absorbing last week’s news on strike action, oil stocks are rallying on rising crude price.
  • Primary is relatively subdued with only four EUR mandates (BEL Group, Japan Tobacco, Permanent TSB and BFF Bank) alongside Aroundtown’s tender and a Motor Fuel Group GBP issue.
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  • Rates opened sharply higher (as did gilts) on yesterday's US moves and got support from local final March PMIs (EU: 46.1, est. 45.7). Reaction to German state CPI data had mixed read-through (rates initially rallying on it before paring back gains) - national German CPI prints at 1300 Lon/0800 ET - our Economist sees the non-HICP national print at +0.4% m/m and 2.2% y/y (c0.5% & 2.2%).
  • Main/XO are marginally wider (+0.1/+2.4) whereas cash bonds are broadly flat (IG -0.1, HY 0.0). Corporate news is relatively light; Aroundtown is tendering for some EUR perps, BBG indices have rebalanced this morning, including Rolls-Royce and Cellnex both into IG.
  • Equities are enjoying a positive start to Q2; SXXP +0.2%, UKX +0.4% and latter flirting with the 8,000 level. SSAB is down c.5% absorbing last week’s news on strike action, oil stocks are rallying on rising crude price.
  • Primary is relatively subdued with only four EUR mandates (BEL Group, Japan Tobacco, Permanent TSB and BFF Bank) alongside Aroundtown’s tender and a Motor Fuel Group GBP issue.