MNI Credit Weekly: Spreads Resilient

Executive Summary: Spreads Resilient As Equities Retreat From Highs

Full piece here: https://roar-assets-auto.rbl.ms/files/64482/24.05....

• €IG eked a marginal tightening this week despite a slight softening in equities and rates. We note several significant risk-off equity moves though there was an absence of notable single name sell-offs in credit aside from the typically volatile CPI Property.
• Spreads tightened by 0.5bp on the week with performance evenly distributed across maturity and rating buckets. Energy and Utils were marginally wider while Fins and Comms outperformed slightly.
• Primary was decently busy for a two-day issuance window, the EUR 12.2bn in supply coming in as the 12^th busiest of the 22 weeks this year. The total cover ratio was the second lowest of the year-to-date while the WAM was the second longest of the year, mainly on the back of the Medtronic 43s and 53s.
• Macro continues to centre on the higher-for-longer narrative with the idea of back-to-back ECB rate cuts having lost steam with most of the recent rounds of ECB-speak playing down the need to pre-commit to such action and with just ~58bp of cuts priced for the year.