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MNI Credit Weekly: Not Too Hot, Not Too Cold

AnalysisCredit AnalysisCreditStory

Executive Summary: Not Too Hot, Not Too Cold

  • China stimulus and expectations for more underpinned spreads this week, with a 2bp average move tighter. The story remains the same for credit; the rate cutting cycle is here and demand for yield remains high. Today’s strong NFP supports the soft-landing narrative, keeping credit in the Goldilocks zone. Autos shrugged off the latest wave of profit warnings, remarkably finishing the week tighter after a weak start.
  • A run of firm economic data culimating in today’s NFP has taken out much of 50bp November cut pricing. Eurozone yields also backed up in sympathy.
  • A quiet week for primary provided technical support. Expectations for next week step down, despite this week’s supply falling short of expectations. Blackout and the looming election should see less activity in the coming weeks.
  • Fund flows remain strong with inflows for all flavours of credit.

Full piece here: 24.10.04 MNI Credit Weekly.pdf

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Executive Summary: Not Too Hot, Not Too Cold

  • China stimulus and expectations for more underpinned spreads this week, with a 2bp average move tighter. The story remains the same for credit; the rate cutting cycle is here and demand for yield remains high. Today’s strong NFP supports the soft-landing narrative, keeping credit in the Goldilocks zone. Autos shrugged off the latest wave of profit warnings, remarkably finishing the week tighter after a weak start.
  • A run of firm economic data culimating in today’s NFP has taken out much of 50bp November cut pricing. Eurozone yields also backed up in sympathy.
  • A quiet week for primary provided technical support. Expectations for next week step down, despite this week’s supply falling short of expectations. Blackout and the looming election should see less activity in the coming weeks.
  • Fund flows remain strong with inflows for all flavours of credit.

Full piece here: 24.10.04 MNI Credit Weekly.pdf