Supply Drag on Spreads Extends to Euro

€IG is set to end a 3-week rally today with curves skewed wider led by those making room for supply (booking.com +5-10bps, Maersk another +3, UniCredit +5). It follows recent weakness in $IG - it had its 2nd straight session of a step wider yesterday (+1.9bps) & primary books were a weaker 3* covered on the $27b of deals that priced. We are still well shy of weekly expectations locally (~€18b) with strong pipeline of mandates, but Primary is expected to quieten into the tail-end of the week (particularly for $) on data that starts tomorrow with GDP and is followed by core PCE & ISM Manufacturing Euro area inflation prints begin on Thursday.

The slow-down to end the week may be little reprieve for spreads heading into March - a seasonally higher supply month.