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EUR Market Wrap

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  • Bunds closed 3-5bp tighter – DM team flagged that morning trade was in a relatively tight range, amid mixed data after German ZEW disappointed, while a surprise fall in UK unemployment, in-line wages and a higher claimant count led to Gilt underperformance. Having strengthened modestly on the day, core Fl pushed to highs which sustained into the close after softer-than-expected US producer prices.
  • Main/XO ended +0.2bp/flat at 61.5bp/325bp while €IG/€HY was +1bp/+4bp. IG Energy underperformed at +1.8bp though remains comfortably the best YTD corp performer at -18.6bp vs. -9bp for €IG corps.
  • $IG/$HY ended -1.7bp/+0.5bp, bringing MoM performance vs. EUR equivalents to essentially flat. Cyclicals were the only IG sector wider at +1bp and now sit as the second worst WoW performer at -2.8bp vs. $IG at -4.5bp.
  • SXXP ended +0.5% while SPX was +1.7%. Notable €IG movers included VF Corp +7%, Aliaxis +7%, Neste +6%, Warner Bros +6%, Baxter International -7%, PostNL -3%.
  • SX5E/SPX futures are +0.3%/flat. In China, following several days of higher yields, the bond market grabbed hold of the drop in aggregate financing and rallied hard throughout the day.
  • Later the focus will be on US July CPI which is forecast to remain at 3% y/y but for core to ease 0.1pp to 3.2% (See https://roar-assets-auto.rbl.ms/files/65736/USCPIPrevAug2024.pdf). UK July CPI/PPI, euro area Q2 employment/GDP and June IP are also released.

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  • Bunds closed 3-5bp tighter – DM team flagged that morning trade was in a relatively tight range, amid mixed data after German ZEW disappointed, while a surprise fall in UK unemployment, in-line wages and a higher claimant count led to Gilt underperformance. Having strengthened modestly on the day, core Fl pushed to highs which sustained into the close after softer-than-expected US producer prices.
  • Main/XO ended +0.2bp/flat at 61.5bp/325bp while €IG/€HY was +1bp/+4bp. IG Energy underperformed at +1.8bp though remains comfortably the best YTD corp performer at -18.6bp vs. -9bp for €IG corps.
  • $IG/$HY ended -1.7bp/+0.5bp, bringing MoM performance vs. EUR equivalents to essentially flat. Cyclicals were the only IG sector wider at +1bp and now sit as the second worst WoW performer at -2.8bp vs. $IG at -4.5bp.
  • SXXP ended +0.5% while SPX was +1.7%. Notable €IG movers included VF Corp +7%, Aliaxis +7%, Neste +6%, Warner Bros +6%, Baxter International -7%, PostNL -3%.
  • SX5E/SPX futures are +0.3%/flat. In China, following several days of higher yields, the bond market grabbed hold of the drop in aggregate financing and rallied hard throughout the day.
  • Later the focus will be on US July CPI which is forecast to remain at 3% y/y but for core to ease 0.1pp to 3.2% (See https://roar-assets-auto.rbl.ms/files/65736/USCPIPrevAug2024.pdf). UK July CPI/PPI, euro area Q2 employment/GDP and June IP are also released.

Date

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