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Flows/Supply

CREDIT MACRO
  • Heavy outflows reported for week ending Wednesday in $ - we already flagged that after heavy outflows in ETF's (below) but we see reports (refinitiv) of conventional outflows adding to that - as we said yest. ETF's have stabilised since - but still no signs of inflows.
  • €IG saw net outflows, €HY more flat. We wouldn't get too excited about firmer flows in €HY than $ - secondary spreads still decompressed & the much larger $HY ETF space is driving the weakness there (refinitiv reported -$2.6b across $HY ETFs).
  • Both $ & € continued seeing inflows into govvies while equites including US had 2nd week of outflows - not much surprise - our IG eqv. baskets did reverse higher in tail end of this week (below) - move was matched in spreads.
  • We noted govvie vs. credit divergences breaking yield buying narrative last week - that's continuing in flows with now more noticeable impact in secondary. Between Friday & Tuesday €IG widened +9bps (avg. +3/session) - sizeable moves given YTD vol has been low (avg.<0.5bps) with only 2 sessions outside of that' seeing 2+ widening.
  • Supply continues to be in backseat; $IG at $32b (vs. c$30b) on well expected bank supply (90% of it) while local supply remains more mute shy of €20b including covered's.

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  • Heavy outflows reported for week ending Wednesday in $ - we already flagged that after heavy outflows in ETF's (below) but we see reports (refinitiv) of conventional outflows adding to that - as we said yest. ETF's have stabilised since - but still no signs of inflows.
  • €IG saw net outflows, €HY more flat. We wouldn't get too excited about firmer flows in €HY than $ - secondary spreads still decompressed & the much larger $HY ETF space is driving the weakness there (refinitiv reported -$2.6b across $HY ETFs).
  • Both $ & € continued seeing inflows into govvies while equites including US had 2nd week of outflows - not much surprise - our IG eqv. baskets did reverse higher in tail end of this week (below) - move was matched in spreads.
  • We noted govvie vs. credit divergences breaking yield buying narrative last week - that's continuing in flows with now more noticeable impact in secondary. Between Friday & Tuesday €IG widened +9bps (avg. +3/session) - sizeable moves given YTD vol has been low (avg.<0.5bps) with only 2 sessions outside of that' seeing 2+ widening.
  • Supply continues to be in backseat; $IG at $32b (vs. c$30b) on well expected bank supply (90% of it) while local supply remains more mute shy of €20b including covered's.