CREDIT OPEN: All eyes on France
All eyes are on French markets this morning to follow a surprise defeat for the RN in the second round of the French legislative election. An overnight drop in OAT futures suggests some modest widening in the OAT/Bund spread to reflect uncertainty pertaining to a hung parliament in which the left wing New Popular Front will hold the most seats having pledged higher public spending, a cut to the retirement age and a boost to the minimum wage during campaigning.
Over in Asia, Hang Seng is leading regional losses today with a fall of up to 1.6% with shipping stocks under notable pressure while China's CSI300 has dipped into negative territory for the year.
Otherwise for today, data is relatively thin on the ground where German imports and exports are both expected to decline MoM in May and follow last week's grim factory orders and industrial production data. Eurozone Jul Sentix Investor Confidence seen falling back into negative territory in July.
BoE's Haskel is today's sole scheduled speaker while rates markets get a break from auction supply.
For more on latest developments see the European Breakfast Briefing.
Monday's supply prospects
Participants in our estimates survey foresee an uptick in activity this week, submitting a combined average forecast of ca. EUR22bn (ex-corp HY) versus last week's final EUR8.93bn (EUR11.36bn including HY). SSAs are anticipated to deliver the bulk of issuance with the European Union lined up for its first deal of H2 2024, whilst all other asset classes are expected to see a week-on-week increase in euro supply.
** European Union EUR offering
** UK GBP Nov 2054 Linker tap
** Eesti Energia EUR300m PNC5.25 green hybrid
** Zavarovalnica Triglav EUR100m 20.5NC10.5 Tier 2
** Banca Popolare dell Alto Adige EUR300m no grow 7yr covered
** Bendigo and Adelaide Bank EUR long 5yr covered
The Street is looking for triple (USD15bn) of what we saw last week to price this week, with the guesses ranging from a low of USD10bn, to a high of USD20bn. For more colour, see the IG WEEKLY WRAP UP.
---- Subscribe to read more ----
To receive this analysis plus much more, subscribe to IGM. Request your free demo of the service today.