27th June 2025
Friday looks set to be a risk-on open in the EU equity complex as European markets play catch-up to another positive Wall Street close amid positive developments on trade, heightened Fed easing bets and as the fragile truce in the Middle East continues to hold. US index futures are also in the green.
With that, headline writers remain poised to spring into action after further gains seen Thursday where S&P500 closed 0.8% higher and within a whisker of the record high set in February while a gain of 0.97% on Nasdaq also left the tech index very close to its all-time peak set in December.
Following that, the Nikkei scaled fresh 6-month highs today, although Hang Seng and mainland China stocks have struggled to extend recent gains after China industrial profits fell off a cliff in May.
Buoyancy in risk markets comes amid ongoing optimism on trade after the White House announced a trade deal had been struck with China on Thursday, albeit with details still lacking, and also signalled flexibility ahead of the early July deadline on reciprocal tariffs.
The recent move lower in DXY and US yields has reversed a bit overnight, although comes after DXY hit a multi-year low on Thursday and the 2-yr US yield closed lower for a 7th straight session as Fed easing bets continued to build.
Turning to the day in prospect and the data spotlight in Europe falls on flash CPI data from France and Spain for May, with both seen nudging slightly higher from prior YoY respective readings of 0.6% and 2.0% (harmonised).
Stateside, the focus is on the core PCE index for May where the annualised reading is expected to tick up to 2.6% from a prior 2.5%.
Supply comes from Italy via up to EUR6.5bn BTPs and up to EUR2bn CCTs while speakers comprise ECB’s Villeroy & Rehn and Fed’s Williams, Hammack & Cook.
For more on latest developments see the European Breakfast Briefing.
Friday’s expected supply
A handful of names remain in the euro pipeline ahead of Friday’s business and could top up the weekly single currency total which currently stands at EUR38.9bn. Of that, IG names have accounted for EUR32.6bn which means we have again surpassed the average IG estimate (of EUR25.5bn) given in our supply survey this week, but we remain short of the highest prediction (of EUR35bn).
** CA Auto Bank EUR500m 3yr green debut
** Servicios Financieros Carrefour debut rated EUR500m no grow 4yr
** Modulaire Group min EUR500m 6NC2 secured
Six borrowers came to the US market Thursday, once again led by Yankee names. Four cross-border issuers accounted for USD6.55bn of the USD8.925bn priced. Mizuho raised USD3bn across three tranches, while Takeda Pharmaceuticals sold USD2.4bn. For more colour, see THE ENDGAME.
What to watch Friday
** Key Data: FR Jun P CPI (07:45), SP Jun P CPI (08:00), SP May Retail Sales (08:00), IT Jun Consumer/Manufacturing Confidence (09:00), EC Jun Economic/Industrial/Services Confidence (10:00), US May Personal Income/Spending (13:30), US May Core PCE Price Index (13:30) and US Jun F Uni of Michigan Sentiment (15:00)
** Key Events: ECB’s Villeroy (08:30) & Rehn (12:00 & 13:00) and Fed’s Williams (12:30), Hammack (14:15) & Cook (14:15) speak
** Auctions: IT to sell up to EUR6.5bn 2030 & 2035 BTPs, as well as EUR2bn 2034 FRNs (10:00)
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