$IG Opens Firm Despite Weakness Locally

No clear direction from opening $IG prints - points to potential cash outperformance vs. €IG's skew wider. No strong signs of any bank stock weakness in US pre-market, S&P futures are +0.4%. 2 $IG issuers are expected keeping primary quiet -we didn't see much weakness in ETF flows yesterday despite the weaker sentiment.

Dassault Systems & UPM biggest falls in €IG equities. We covered UPM earnings this morning. S&P has been playing catch-up to Moody's and has had it on positive outlook since June marking a potential uplift into A-. Last commentary was potential upgrade in next 2yrs once mill in Paso de los Toros & Leuna biochemicals plant is in full capacity & makes positive contribution to earnings - on the former management expects it to be EBIT positive in 1H24 (it turned EBITDA positive in 2H23 after production issues were resolved) while the Leuna project is on track for production "by the end of 2024". € 28-31's are 1-3bps wider, it does have $ '27 line. We don't see much value in the € curve/seems fairly priced.

Software name Dassault is also falling on earnings & guidance miss - sees FY24 Rev's at €6.35-6.43b vs. c€6.47b. Its high-grade A lines are trading past the weak guidance.