CREDIT OPEN: Another busy week expected for primary
EU stocks are set to claw back some of the ground lost on Friday at this morning’s open with help from a positive Asian handover.
After the Fed went big last week, expectations for PBoC easing remain in the ascendancy after China surprised with a 10bp cut to its 14-day reverse repo rate (from 1.95%) and announced an unscheduled press conference (due to be held Tuesday).
With that, CSI300 is up as much as 0.9% with Hang Seng also rising although Nikkei is shuttered for a holiday.
On the data front today are multiple PMI releases from across the globe, including the US, UK, Eurozone, Germany, and France. Aside from that, a swathe of CB officials are scheduled to speak today comprising ECB’s Cipollone and Fed’s Goolsbee, Bostic and Kashkari.
Today’s Fed speakers follow late Friday comments from Fed Waller that he would consider another large rate cut if the jobs market worsens & if data comes in soft.
Auction supply comes from Belgium (EUR2.3-2.8bn 2029, 2033 & 2039 OLOs) and also the EU (up to EUR5bn 2029 & 2044 Bonds).
Otherwise, attention also remains on geopolitics given rising tensions between Israel and Hezbollah following recent hostilities although the U.S. State Department has directly cautioned Israel against escalating the conflict.
Gold hit a new record high during Asian hours, taking the price as much as 27% higher YTD.
Elsewhere, UK Chancellor Reeves is reportedly set to tell attendees at the Labour Party conference today there will be no return to austerity which follows recent claims that gloomy rhetoric from the party on public finances has depressed consumers.
For more on latest developments see the European Breakfast Briefing.
Monday’s supply prospects
Supply is expected to pick up again this week with the schedule clear of crucial central bank verdicts or major holidays. Respondents in our weekly issuance poll are calling for EUR28.5bn in single currency supply to cross the tape this week (excluding HY corps), with a few names already in the immediate pipeline after recent roadshows, as detailed below. A batch of others continue or start investor meetings today ahead of deals expected later in the week (see IGM’s ROADHSOW CALENDAR).
** Knorr-Bremse EUR 5yr vanilla & 8yr green two-part
** Gemeinsame NRW Kommunen EUR 9yr sub-benchmark bond (Staedteanleihe No. 8)
** Spar Nord Bank inaugural EUR250m (exp) 6nc5 green senior non-preferred
** KHFC EUR long 3yr or 5yr social covered
Stateside, the Street is looking for on average USD24bn in new high-grade debt sales to price this week. While that may not seem like a lot, it would still be enough to bring ex-SSA issuance for the month to close to USD160bn, which would top all monthly estimates including the highest one of USD146bn. See the IG WEEKLY WRAP UP.
What to watch Monday (and for the week)
** Key Data: FR Sep P HCOB Composite/Manufacturing/Services PMIs (08:15), GE Sep P HCOB Composite/Manufacturing/Services PMIs (08:30), EC Sep P HCOB Composite/Manufacturing/Services PMIs (09:00), UK Sep P S&P Global Composite/Manufacturing/Services PMIs (09:30), US Aug Chicago Fed Nat Activity Index (13:30) and US Sep P S&P Global Composite/Manufacturing/Services PMIs (14:45)
** Key Events: Fed’s Bostic (13:00), Goolsbee (15:15) and Kashkari (18:00) speak, along with ECB’s Cipollone (14:00)
** Auctions: EU to sell up to EUR5bn 2029 & 2044 Bonds (10:30) and BE to sell EUR2.3-2.8bn 2029, 2033 & 2039 OLOs (11:00)
** Holidays: Japan Autumnal Equinox Day
** Viewpoint - The week ahead:
- Plenty of Fed speak, including Governor Powell (Thur)
- RBA on hold (Tue). Hawkish/dovish? Prepping ground for Q4 cut?
- Riksbank to cut 25bp (Wed). SNB to cut 25bp (Thur). ECB CES (Thur)
- EMU August money supply (Thur). French/Spanish prelim September CPI (Fri)
- Prelim September PMIs (Mon). German September Ifo (Tue), cons confidence (Wed)
- US September cons confidence (Tue). Prelim August durables/weekly claims (Thu). August PCE (Fri)
All times BST
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