Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CREDIT MACRO
- Fund flows for week ending Wednesday have held up surprisingly well - surprising give secondary performance to Thursday was €IG/HY +4/+26 and $IG/HY +2.5/+9. We are looking at significant add-on widening to €IG/HY today.
- €IG in particular saw strong inflows, only reported weakness was in € govvies and large outflows from £IG. Latter is +5/+8 wider WTD which is not flashing concern and we didn't see any strong signs of weakness in primary (both consumer deals priced through).
- More timely ETF flows are not flashing red either (below) including in smaller €IG's IEAC.
- X-factor giving support may be the US CPI led rates rally that has left 5Y bunds -32bps and USTs -24 WTD. Its given support for total returns; both € and $IG are close to highs at +0.4% YTD return.
- As a aside to below charts €IG corps have effectively moved in-line with $IG this week (+3). € financials has been the drag (+6).
- Alternative indication of that weakness being systematic/in financials and not fundamental is swap spreads that have widened +15bps. €IG spreads vs. swaps are actually in -2.5bps to Thursday.
- Arguably it leaves funding conditions more favourable (€IG yields are -10 in and $IG -16) for most corps. We saw some evidence of that this week; ex. EDF (French), Motability and Dell, pricing only gave up single-digit NIC's.
- Supply expectations (bbg) for € and £ IG/HY (incl. covered) have not picked up at ~€17b from ~€20b last week (actual €14.3b). $IG is compensating for this week at $25-30b up from a revised down $15b this week (actual $5.8b).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok