EUR Market Wrap

• EGBs bull flattened on Friday with 2y bunds -11bp and 10y -5bp after weaker-than-expected US producer prices boosted rates which had already been trading richer on dovish ECB rhetoric and Middle Eastern tensions. These moves brought bunds into richer WoW territory though USTs outperformed by over 10bps WoW out to 10y.
• Main/XO tightened 0.4bp/3.6bp on Friday, outperforming SR/Sub Fins (+0.2bp/+0.9bp) and CDX IG/HY (+0.3bp/+1.9bp). YTD performance for Main (+1.8bp) is back broadly in line with €IG (+1.2bp) though XO (+11bp) underperformance vs. €HY (-16.5bp) persists.
• Primary credit markets were closed on Friday though €IG Corp supply for the week came to €7.7bn with €HY Corp at €2.2bn and €FIG supply at €28.2bn.
• €IG/€HY finished Friday flat/+6bp with HY paring some of this years outperformance though still sitting close to 18bp tighter vs. €IG YTD. Within €IG, 1-3yr bonds were the only segment wider DoD though still outperforming belly spreads by 5bps YTD. IG sectors were mixed with Energy and Automotive underperforming slightly (+1.7/1.1bp). YTD we see Tobacco (-5bp though the index is small) and Transportation (+6bp) setting the range.
• Asian equities are mixed but broadly higher with CSI stocks underperforming (-0.2%) after the unexpected hold of China’s 1-year MLF rate. SXXP futures are +0.4% ahead of the open.
• No US data/speakers today (market closed for MLK day). In Europe we have:

Time C Event

07:00 GE Wholesale Price Index

07:30 EC EC/GE/FR/IT/SP BBG Jan. Econ Survey (5 min gaps)

09:00 GE GDP NSA YoY & Budget Maastricht % of GDP

09:00 IT Trade Balance

09:30 IT General Government Debt

10:00 EC Industrial Production & Trade Balance

14:15 EC ECB's Holzmann