24th June 2025

European markets are poised for a strong open Tuesday, with Eurostoxx50 futures climbing 1.412% following positive sessions in the US and Asia. Overnight, the S&P500 and Nasdaq both finished just shy of 1% higher, while Asian markets continued the upbeat trend with the Nikkei rising 1.15% and the Hang Seng surging around 2%.

The apparent ceasefire between Israel and Iran announced by US President Trump has become the market's primary focus. Despite the announcement, Israel continues to report several waves of missiles fired from Iran, creating a somewhat tenuous peace. Markets have responded with rising stocks and falling crude prices.

Iranian Foreign Minister Araghchi has complicated the ceasefire narrative, stating there is "NO 'agreement' on any ceasefire" while adding that Iran has "no intention to continue our response" if Israel stops its "illegal aggression." Iran has also warned the US of a "more severe response" should American strikes on Iranian soil be repeated.

Gold has retreated to a fresh two-week low of approximately USD3,333 per ounce before recovering slightly, while WTI crude continues Monday's sharp losses, trading near USD65.45/brl. The dollar has weakened to a one-week low.

Treasury bonds are extending Monday's gains ahead of today's 2yr note auction, with markets digesting dovish Fedspeak. Fed Governor Bowman suggested rate cuts could come as early as July if inflation remains subdued, while Chicago Fed President Goolsbee noted the surprising lack of inflation impact from recent tariffs.

Central bank communications will dominate today's agenda, with BOE's Bailey and ECB President Lagarde speaking. The main event will be Federal Reserve Chair Powell's semi-annual testimony before the House Financial Services Committee, where investors will scrutinise his comments for clues about potential rate cuts.

Economic data releases include Germany's June IFO Business Climate index, expected to show continued improvement. In the US, markets await the Conference Board's Consumer Confidence Index, Richmond Fed's Manufacturing Index, and housing price data.

Chinese economic sentiment received a boost as a PBOC adviser indicated Q2 GDP growth likely exceeded 5%, adding that China still has room for additional fiscal support. Meanwhile, Japan's Ministry of Finance confirmed plans to reduce super-long JGB issuance.

With multiple Fed speakers on today's schedule alongside Powell's testimony, markets will be particularly attentive to any signals regarding the potential July rate cut that some officials have begun to openly discuss. The Treasury's USD69bn 2yr note auction will also be closely watched amid changing rate expectations.

For more on latest developments see the European Breakfast Briefing.

Tuesday's issuance prospects

Market fallout from the US bombing of Iranian nuclear facilities at the weekend was fairly contained on Monday, and whilst stocks traded in the red for much of the session, the primary bond window remained open. Making the most of what remain strong conditions in the European credit market on the day were a trio of IG corporates and a quartet of non-covered FIG issuers, which between them raised EUR4.95bn to kick off a week which participants in our issuance poll expect to yield on average EUR25.5bn in the single currency (ex-HY corporates). There was also some activity in the pipeline at the start of the week, with more euro paper and SSA dollar issuance set to come on Tuesday (see pipeline below). Given the upbeat tone this morning we also expect opportunistic supply to emerge, it what could be a very busy session.

** Slovenia EUR 10yr SLB debut
** Bpifrance EUR 8yr social
** Denmark USD 2yr at CT2 +7 area IPTs
** JBIC USD 3yr global at SOFR m/s +48 area IPTs
** IFC UDF 5yr global at SOFR m/s +43 area IPTs
** Corporacion Andina de Fomento USD1bn no grow 3yr at SOFR m/s +75 area IPTs
** Orlen EUR 7yr green
** Raiffeisen BankZrt EUR300m 6NC5 green SNP
** Ageas GBP long 3yr senior
** DZ HYP EUR May 2035 covered
** Webuild EUR400m 6yr
** Maxam Prill EUR 5NC2 secured

Most borrowers moved forward with funding plans in the US on Monday despite what was originally expected to be a tricky backdrop given rising tensions in the Middle East. JBS USA led the way with a three-part deal totaling USD3.5bn. By day’s end, six borrowers had priced USD8.95bn, kicking off a week projected to bring USD23bn in fresh supply on average. For more colour, see THE ENDGAME.

What to watch Tuesday – US data in focus

** Key Data: GE Jun IFO (09:00), UK Jun CBI Trends Total Orders/Selling Prices (11:00), US Q1 Current Account Balance (13:30), US Jun Richmond Fed Manufacturing Index (15:00) and US Jun Conference Board Consumer Confidence (15:00)

** Key Events: BoE’s Greene (10:30), Ramsden (14:35), Bailey (15:00) & Breeden (16:50), Fed’s Hammack (14:15), Powell (15:00), Williams (17:30), Collins (19:00) & Barr (21:00) and ECB’s Lane (14:55 & 15:15) speak

** Auctions: UK to sell GBP1.7bn 2035 Linkers (10:00), GE to sell EUR4bn 2027 Schatz (10:30) and US to sell USD69bn 2yr Notes (18:00)

All times BST

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