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Euro HY sentiment seems contained for now

CREDIT MACRO
  • Supply expectations (bbg) are quieter in both markets at €16b/$20b with Easter holidays/exchange closures on Friday.
  • As we flagged $IG did hold a tad firmer on Friday (+0.3bps) ending the week -1bp tighter - lower supply, some negative single name news that was skewed to €IG & local financials paring a recent strong rally are being chalked up as the reasons for €IG underperformance (+1.7).
  • That was more noticeable in HY (€ +22bps vs. $ -6bps) on news of restructuring for Altice and Ardagh. We don't see any noticeable outflows from the smaller €HY ETF's to flag as alarm ($HY did see outflows last week but that reversed on Thursday's session).
  • Supporting the €HY sentiment is contained for now was strong performance (-21bps) from BB spreads.

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