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EUR Market Wrap

CREDIT UPDATE


  • EGBs tightened at the open from a combination of the late UST rally, downticks in US & Chinese equities, sources reports flagging less room for UK fiscal easing and softer-than-expected French & Australian CPI prints. 2y/10y bunds have widened since then to sit -2bp/-3bp after regional German CPIs helped bias the space away from best levels.
  • Main/XO muted today, sitting flat/+1bp with iTraxx Fins between the two. FICM is showing €IG/€HY as flat/+3.5bp with Atos bonds weighing on the HY print. Primary is relatively quiet again today: Two €IG Corps, two €HY corps, two covered and one T2 bank deal.
  • SXXP is flat on the day with value and mid-cap stocks outperforming. Retail is by far the biggest mover as H&M drops 11% on the flagged Op Profit miss while their CapEx guidance is contributing to their two EUR credit spreads widening 6bps. Tech also down over 1%, led by Ericsson which UBS just cut to sell on the threat from the new OpenRAN protocol.

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