CREDIT BULLETS: Risk assets continue to ride AI wave

• Stocks appear to have taken their cue from the (once again) blockbuster earnings of US chip giant Nvidia with bourses across Europe seeing positive moves over the morning session. The broader based Stoxx600 advanced as much as 0.36% whilst the FTSE lagged behind after last night's surprise call for a general election on 4th July. Also overnight the FOMC minutes revealed that members are still willing to consider tightening (if needed) and that there was still debate about how restrictive current rates actually are. Today's data slate has been dominated by PMI's with French, German, EC & UK May Manufacturing PMIs all improving from prior (UK to best since mid-2022). Services outturns were mixed - France & UK moderated, EC was unchanged and Germany went its own way and picked up from prior. Following those numbers the market learned that ECB negotiated wage data for Q1 had shown a 4.7% YoY increase - that was a 0.2pp rise from the prior reading and took the figure back to the same as Q3 of 2023. It appears perhaps that second-round effects are taking longer to work through the system and could be cause for the ECB to be more patient in terms of the pace of rate cuts
• Stoxx600: Up as much as 0.36% and unsurprisingly led by IT (+1.62%). The index would have surged higher if not for significant drag from Utilities (-2.15%) and Real estate (-1.41%)
• Govvies: Gilts show a small yield decline after y'days gap higher (although moves are restricted to -0.5 to -1bp across the curve). Bear flattening across EGBs with front end (2yr) 3.5-4bp higher in GER, IT and SP
• Primary: The pace remains frenetic on Thursday with another 18 euro tranches on offer to follow the record breaking 30 that priced during the previous session. Corps are again leading the way, closely supported by non-covered FIG issuers (full details below)
• CORP SNAPSHOT: Eight more issuers offer up variety
• FIG SNAPSHOT: Thursday rush clears pipeline
• SSA SNAPSHOT: The calm after the storm
• Performance checker of Wed's EUR benchmark deals (bp change from reoffer)
  • Corp: AMT 3.9% 05/30 -0.5, AMT 4.1% 05/34 -1.5, SCMNVX 3.5% 05/26 -3, SCMNVX 3.5% 08/28 -3, SCMNVX 3.5% 11/31 -0.5, SCMNVX 3.625% 11/36 -0.5, SCMNVX 3.875% 05/44 +1, AKERBP 4% 05/32 +0.5, TAP 3.8% 06/32 unch, SAGAX 4.375% 05/30 -5, AMCR 3.95% 05/32 -4
  • Covered: CCDJ 3.125% 05/29 unch, VORHYP 3.125% 05/30 -2
  • FIG: FIDELI (RT1) 7.75% PNC5.5 -20, NOVALJ (Snr) 4.5% 6NC5 -1, SWEDA (Snr) 3.375% 5/30 -1
  • SSA: MADRID 3.173% 07/29 -0.5, FINNVE 2.875% 08/29 unch, KOMINS 3% 09/27 -1.5, RAGB 3.2% 07/39 unch, PGB 3.625% 06/54 +2, RHIPAL 3.25% 05/26 -1
• Ahead: CB speak from the BoE, ECB and Fed is spread across the day, interspersed with the latest US weekly jobless claims data, new home sales and Kansas City Fed Manufacturing Activity. S&P futures +0.5%, Nasdaq futures +0.83%

Live deals/updates

Added to the pipeline

n/a

Key economic data / events so far

• EC May P HCOB Composite/Manufacturing/Services PMIs mixed with services weaker than f/c at 52.4/47.4/53.3 (exp 52.9/46.1/53.6)
• UK May P S&P Global Composite/Manufacturing/Services PMIs mixed with manufacturing stronger than f/c at 52.8/51.3/52.9 (exp 54.0/49.5/54.7)

Auctions

• US to sell USD16bn 10yr TIPS (18:00)

Ahead

• 5 S&P500 companies report
• BoE's Pill (12:30)
• US Weekly Continuing/Initial Jobless Claims (13:30)
• ECB's Villeroy (14:45)
• US May P S&P Global Composite/Manufacturing/Services PMIs (14.45)
• EC May P Consumer Confidence (15:00)
• US Apr New Home Sales (15:00)
• US May Kansas City Fed Manufacturing Activity (16:00)
• Fed's Bostic (20:00)

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