US Open

We flagged potential $IG outperformance on morning prints - to no avail - IG closed +3.5 wider yesterday (€IG +2.8bps) - the jump in spreads pushing it wider on the year. Similar to local spreads strong underperformance from financials (+4.4 vs. corp's +3). Total returns YTD are still muted (but positive) across both € & $IG & similar story in HY indices (though there is up in quality trends driving diverging spreads - see flows above).

€IG spreads are skewed tighter (against bunds) this morning - banks & Auto curves (VW) among those reversing (some) of yesterday's sell-off - though bar a strong move tighter this afternoon, spreads will end firmly wider on the week. €IG equity basket is up +0.5%, Auto names among the best performers - Merc reporting prelim results yesterday after the close with strong beat - analyst takes; NSN S87Y5XT1UM0W <GO>. Real Estate up 1% reversing some of yesterday's weakness. S&P futures are +0.6%, Tech heavyweights (Meta +17% & Amazon +7% on earnings) helping the index up in pre-market.

Rates are unch while local swap spreads are making a strong move tighter (-2bps in the belly) & adding to a already volatile week. Still on track to end +2.6 wider & now only -2bps shy of crossing wider on the year. All eyes on payrolls this afternoon - consensus for NFP at +185k, with primary dealer median notably higher at 205k. Comprehensive annual revisions could drive additional volatility. Our Economist take; "See risk of market reaction skewed towards dovish surprises in AHE growth against the backdrop of recent strong productivity growth."