CEEMEA OPEN: Pipeline activity still remains subdued
- The DXY is softer and breached below the 102.600 handle. To recap, US CPI eased more than expected to 2.9% y/y in July from 3.0% y/y prior, while m/m met the f/c and climbed to 0.20% from -0.10% prior, Core CPI met the f/c and fell to 3.2% y/y from 3.3% y/y prior, with m/m data also meeting the f/c and rising to 0.2% from 0.1% prior, paving the way for September rate cuts.
- After hours yesterday, the Fed's Goolsbee reiterated that economic conditions will warrant the size of rate cuts and he is more concerned about the jobs mandate 'on the margin'.
- Fed's Bostic expressed that he is "open" to an interest rate cut in Sept, adding that the Fed can't "afford to be late" to ease policy owing to signs of a cooling labour market. Also, while prices ease, officials need to be conscious of their mandate of maintaining full employment.
- In the markets, S&P added 0.4% to a new 13 day high on Wednesday & the futures are up 0.2% to a 2wk best ahead of the EZ open. Nikkei & CSI300 are up 0.9% & 1.15% in late trade after recent upbeat economic data from the large global economies.
- Sep24 Bund futures traded in a 1/5pt range o/n (-1/3pt at most). Recall, very heavy Gilt outperformance narrowed the 10yr yield spread vs Bunds by 5.7bps to 164.5bps, just above the four-week tight at 163.8bps.
Fresh in the CEEMEA Pipeline
- No new deals in the pipeline.
On the Radar
- Still awaiting for further updates from The Republic of Slovenia, rated A3 (Stable) by Moody’s, AA- (Stable) by S&P, A (Stable) by Fitch and AA- (Stable) by JCR, who has filed Securities Registration Statement with the Japanese authorities for its potential JPY-denominated senior notes in Samurai format.
- The JPY Notes may be issued in the near future subject to market conditions
- The JPY Notes, if issued, are expected to be rated AA- by S&P and AA- by JCR
- Tenors: 3yr / 5yr / 7yr / 10yr
- One or more tranches may be dropped subject to issuer's preference and demand & each tenor may include Social Bond and/or Non-labelled bond tranches.
- Bookrunners include BNP Paribas, Nomura and SMBC Nikko.
Priced Deals
- No new priced deals.
What to watch on Thursday
- The main events in CEEMEA today are Turkey's govt budget balance (8GMT) & Net Bond and Stock holdings (11:30GMT).
- In the US, US Retail Sales is due, Philly Fed Business Outlook, Initial Jobless claims, Continuing claims, Import/Export price data (12:30GMT), Capacity utilization, Manufacturing Production (13:15GMT), Business Inventories, and NAHB Housing market index (15GMT).
- Fed’s Musalem and Harker are scheduled to speak today.
Wider market Sentiment
- USD Index at 102.567
- UST 2yr/10yr at 3.953%/3.829%
- Bund 2yr/10yr at 2.346%/2.181%
- Brent at $79.96/brl
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