CREDIT BULLETS: Markets in a holding pattern
- EU stocks shake off some very minor opening weakness but the simple reality is that major markets are in a holding pattern ahead of US CPI (today) and the ECB (Thu). Seasonally thin conditions and a lack of market depth mean we shouldn’t be surprised to see outsized moves in reaction to either though. In the rates space, German yields remain choppy, gilts underperformed into and after this morning’s 10yr UK auction while US yields are creeping higher ahead of today’s 10yr note reopening to follow Tue’s mediocre 3yr UST sale. News-wise, there’s been very little incrementally new this morning while JPY has been whippy but ultimately weaker after a flurry of mixed BoJ source comments (via BBG) ahead of next week’s meeting. Ahead of the Wall Street open, US index futures are small up with S&P500 and Nasdaq coming off back-to-back losses
- Stoxx600 -0.28% at worst before scrubbing losses. Communication Services leading gains
- Govvies: Choppy session for German debt with no overall direction (again) although recent outperformance of French debt stalls (10yr GER/FR spread up to +77 vs. Tue’s low at 73bps)
- Primary: Issuers stay away from euro market leaving this week’s single currency total at EUR1.25bn. HY green corporate paper on offer from Virgin Media O2 Vendor Financing (7.25NC3) targeting a yield +/- 0.125% around 8% at present (see below)
- Ahead: US CPI the main event (annual headline rate seen edging up to 2.7%, core steady at 3.3%) while a 10yr UST sale continues latest refunding cycle. S&P futures +0.1% and Nasdaq futures +0.2%
Live deals/updates
| Issuer | Deal Type | CCY | Amount (mn) | Maturity | Initial Price Talk | Latest Px Talk | Final Pricing | Book Size (mn) |
| Virgin Media O2 Vendor Financing Notes V Designated Activity Company | Green Bond | GBP | 400 | 7.25NC3 | Low 8% | 8%a (+/-0.125) | - | Awaiting Update |
Key Data
- No key data was released on the morning of 11th Dec
Auctions
- UK sold GBP4bn 2034 bonds at 4.332% (b/c 2.87)
Ahead
- US Dec 6 MBA Mortgage Applications (12:00)
- US Nov CPI (13:30)
- US Nov CPI Core Index (13:30)
- CA Bank of Canada Rate Decision (14:45)
- US to sell USD39bn 10yr notes reopening (18:00)
- US Nov Federal Budget Balance (19:00)
All times GMT
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