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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
- £IG was the only subsector to see outflows last week but has since reversed to flat. Inflows continued everywhere else (for the week ending Wednesday) including continuing strength in €IG. HY also edged in inflows across all regions despite a harsh spread sell-off last week. No signs of weakness in recent $ETF flows (below) or in €IG's IEAC.
- Rates in a holding pattern after last week's step lower/rally means IG across both regions holds onto <1% YTD returns while HY edges in carry; no one close to €HY's YTD performance of 2.8%.
- Couple of weeks back we said hard to care about flows heading into seasonal supply lull - that may have kicked in earlier than we expected on French political jitters. Supply remaining hampered in €IG saw book cover jump to 2nd highest this year (see above) and echo's flows in that investor demand otherwise remains fine. We did see another deal get pulled (right before books closed) - we saw it as on weak fundamentals but it hasn't stopped investors in the past jumping on the carry (MS+313).
- For reference, first round of French elections come 30th June 2nd 7th of July, UK elections (consensus labour win/lower vol) in-between on the 4th of July. Even if we see held back supply return then, hard to see it being a issue given July/Aug seasonal lull already there. Bloomberg's US IG pipeline this morning titled "Issuance Activity Dries Up as Summer Begins" after its market went quiet post a mid-week holiday - as noted before our summer slowdown tends to be more stark than $s.
- Supply this week for €/£ IG/HY (incl. covered) came well below expectations at €7b vs. c~€17b with HY doing some of that legwork for us. $IG in contrast came well above at $31b vs. c$15-20b - impressive feat given it was only active for 2 days. It was helped by Home Depot's $10b/9-part acquisition funding.
- Supply expectations (bbg) for €/£ IG/HY has shifted lower to ~€10b and is unch in $IG at $20b.
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.
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