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MNI Credit Weekly; Beijing Delivers

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MNI (LONDON) - Executive Summary: Beijing Delivers

  • The Bank of China’s liquidity injection on Tuesday spurred a risk-on move in risk assets with Asia leading the way followed by Europe. The CSI 300 rallied 16%, Nikkei +7% and Eurostoxx 50 +4%. The US, which already trades at elevated P/E ratios, saw a +1.3% move in the Nasdaq and 0.9% in S&P 500.
  • Implied ECB rate cut probability moved from 25% to 83% for a 25bp cut at the meeting on 17th October. Weak CPI figures on Friday were the final motivation but earlier in the week we had soft PMIs.
  • Credit was marginally wider with bonds about +1bp on average. Real estate was the top performer, led by high-beta names. Consumer Discretionary widened +2.5bps despite the Asian-inspired rally in retail branded goods; Autos dragged down the sector with European manufacturers facing both increased import competition and constrained demand.
  • Primary activity was strong as borrowers continue to tap the market ahead of potential volatility around the Nov 5th US Election. This week was the busiest of the month in terms of number of new deals.

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MNI (LONDON) - Executive Summary: Beijing Delivers

  • The Bank of China’s liquidity injection on Tuesday spurred a risk-on move in risk assets with Asia leading the way followed by Europe. The CSI 300 rallied 16%, Nikkei +7% and Eurostoxx 50 +4%. The US, which already trades at elevated P/E ratios, saw a +1.3% move in the Nasdaq and 0.9% in S&P 500.
  • Implied ECB rate cut probability moved from 25% to 83% for a 25bp cut at the meeting on 17th October. Weak CPI figures on Friday were the final motivation but earlier in the week we had soft PMIs.
  • Credit was marginally wider with bonds about +1bp on average. Real estate was the top performer, led by high-beta names. Consumer Discretionary widened +2.5bps despite the Asian-inspired rally in retail branded goods; Autos dragged down the sector with European manufacturers facing both increased import competition and constrained demand.
  • Primary activity was strong as borrowers continue to tap the market ahead of potential volatility around the Nov 5th US Election. This week was the busiest of the month in terms of number of new deals.

Full piece here:

Keep reading...Show less