CREDIT OPEN: Euro pipeline cleared out but Friday supply possible
EU stocks look set for a steady start to Friday’s session to follow another day of solid gains seen Thursday and comes despite a weaker close on Wall Street where S&P500 (-0.21%) and Nasdaq (-0.89%) both lost ground with sentiment in tech weighed by Apple on concerns of weaker iPhone sales into China.
Staying with China and the main focus overnight was the release of China’s latest data dump where Q4 YoY GDP beat at 5.4% and was sufficient to push full year 2024 GDP growth to exactly +5.0%. Industrial production and retail sales also beat forecasts in Dec.
That’s been supporting sentiment in China and HK equity markets overnight although Nikkei continues to struggle while USTs have been holding around NY closing levels after yields moderated for a second day Thursday.
Today starts with another update from the UK where retail sales are expected to grow by 0.3% MoM in Dec on an ex-auto fuel measure.
US housing starts for Dec will kick off this afternoon's releases, coming ahead of the release of industrial production for Dec. The latter is expected to expand after three straight months of contraction, aided by a modest projected rise in the utilisation rate.
A trio of ECB speakers take to the airwaves although Fed speak is off the agenda.
Rates markets get a day off in terms of supply.
Earnings will also provide a driver where updates come from seven S&P500 firms ahead of the 40 companies which report next week.
For more on latest developments see the European Breakfast Briefing
Friday’s expected supply
The weekly euro IG supply total got closer to the average estimate of EUR72bn on Thursday as another host of issuers tapped the market for a combined EUR21.5bn to put the week at EUR67.75bn. Those offerings emptied the near-term public euro pipeline but given the strong demand seen again Thursday, we shouldn’t rule out some Friday supply to push us closer to the weekly supply forecast. Dollar paper is certainly on the menu, with the Province of Saskatchewan having released IPTs for a USD1bn no grow 5yr yesterday afternoon.
** Saskatchewan USD1bn no grow 5yr at SOFR m/s +60 area IPTs
Last year, high-grade issuance topped the average weekly estimates an unprecedented 34 times, and so far, they’re three for three with ex-SSA issuance for the week standing at USD48.45bn, thanks in large part to the “big six” banks. Coming into this week, the Street was expecting, on average, USD40bn in new supply to cross the tape. With all six quarterly earnings in the books, five banks chose to take advantage of falling interest rates and pent-up investor demand to tap the market Thursday, the first time, at least in recent memory, that number came to market in one day, collectively raising USD26.9bn or 91.3% of the USD29.45bn priced on the day. For more colour see THE ENDGAME.
What to watch today
** Key Data: UK Dec Retail Sales (07:00), EC Dec F CPI (10:00), US Dec Housing Starts (13:30), US Dec Building Permits (13:30) and US Dec Industrial Production (14:15)
** Key Events: ECB’s Nagel (10:00), Escriva (10:30) and Centeno (10:30) speak
** Auctions: No major term auctions scheduled for Friday 17th Jan
** Earnings: 7 S&P500 companies report
All times GMT
---- Subscribe to read more ----
To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.