CREDIT OPEN: European Union lining up latest sale

EU stocks are set for opening gains this morning with help from a constructive overnight lead where US yields have continued to ease back while US index futures are in the green, all very handy for those scheduling a go/no-go call this morning.

Notably, Australian stock indices hit records highs today, led by the tech sector, while mainland China markets scrubbed early losses where the CSI300 index is set to snap a three day losing run.

Ahead of that, S&P500 (+0.39%) and Nasdaq (+0.60%) recovered their footing after back-to-back losses seen either side of the weekend that were chalked up to a combo of fading rate cut bets to follow hawkish comments from Chair Powell and a general sense that Trump trades were losing steam.

Looking at the day in prospect and this morning’s final reading on Oct euro-area inflation won’t be market moving while later comes US Oct housing starts & permits. The US data comes after the NAHB Housing Market Index released Monday showed confidence amongst US homebuilders climbed to a seven-month high in Nov.

Otherwise, it’s a busy day for speakers which includes an appearance by BoE’s Bailey who testifies before the TSC on the bank’s quarterly Monetary Policy Report.

Auction supply comes from the UK via a 2038 Gilt sale while the EU rates complex gets a break from substantial supply, leaving the stage clear for today’s latest syndicated sale from the European Union.

For more on latest developments see the European Breakfast Briefing.

Tuesday’s supply prospects

The European Union (dual-tranche tap) is set to be the main attraction on Tuesday, as is usually the case when they are in town. That after it was another corp-centric session for the European bond market Monday as the asset class accounted for EUR4.2bn (7 lines) of the day’s final EUR5.9bn (11 tranches) single currency total. That kicked off a week that is expected to yield an average EUR24bn (ex-HY) of euro paper according to participants in our weekly issuance poll.

** European Union EUR Dec 2031 and Feb 2043 green taps

** Abertis EUR PNC5.25 hybrid

** SNAM EUR 7yr &/or GBP 12yr SLB

** Iliad EUR500m min 5.5NC2 secured at 5.5-5.75% IPTs

** TUI Cruises EUR375m 5.5NC2 at 5.25-5.5% IPTs

Stateside, nine ex-SSA high-grade issuers tapped the US primary market Monday, raising USD11.1bn. That brought issuance for the month of November to USD59.35bn, enough to top the lowest monthly estimate of USD50bn, but not quite enough to reach the average estimate of USD70bn just yet. For more colour see THE ENDGAME.

What to watch today

** Key Data: EC Oct F CPI (10:00) and US Oct Housing Starts/Business Permits (13:30)

** Key Events: ECB’s Elderson (08:45), Muller (09:00) & Panetta (10:00), BoE’s Bailey, Lombardelli, Mann & Taylor (all 10:00) and Fed’s Schmid (18:10) speak

** Auctions: UK to sell GBP3.25bn 2038 Gilts (10:00)

** Earnings: 3 Stoxx600 & 5 S&P500 companies report

All times GMT

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