CREDIT OPEN: Friday's pipeline empty but opportunistic supply possible
EU stock bulls look set to bank a few gains this morning to follow a four-day win streak for Stoxx600 with yesterday’s 1.09% gain taking the index to yet another record high.
Over in Asia, further strength in tech has lifted Hang Seng over 2.7% higher today while US index futures are in the green which comes after yesterday’s threat of reciprocal tariffs failed to prevent gains for S&P500 (+1.04%) and Nasdaq (+1.50%). Those gains were set against a backdrop of subsiding yields as US debt markets took comfort from some softer components of the PPI report and the completion of the latest supply cycle.
So what could spoil the party today? Well, it could be data where key US updates comprise retail sales and industrial production for Jan where the former is set for MoM decline at the headline level. Ahead of that, we get Eurozone 4Q Preliminary GDP.
Elsewhere, it’s a slower day for earnings and speakers while rates markets get a break from supply which could help to underpin the relief rally in the rates complex seen on Thursday.
Otherwise to note, Monday is a holiday in the US (President’s Day).
As we go to print, headline writers are likely watching gold closely where the spot price is pushing up toward Tuesday’s record high, making 3k gold a potential reality this side of the weekend.
For more on latest developments see the European Breakfast Briefing.
Friday’s expected supply
At the time of writing there were no confirmed deals for Friday's business but given the strong response for this week's deals so far, we shouldn't rule out some opportunistic activity. Even if nothing should pop up then we have already beaten the highest combined euro IG issuance estimate of EUR61bn given by participants in our weekly poll, with the current total at EUR61.85bn. That is, of course, flattered by some big trades from France, Italy and the EU, with SSAs having accounted for EUR38.15bn of this week’s overall haul.
The relief rally in the Treasury market was enough to entice three high-grade corporate borrowers to dip into the US public debt market Thursday. However, the day’s total did little to lift the spirits in the high-grade primary market this week, where we have seen 10 borrowers raise only USD17.35bn, not nearly enough to reach even the lowest weekly estimate of USD25bn, let alone the average weekly estimate of USD35bn. This marks the first week this year that issuance has failed to surpass the average weekly estimate. For more colour see THE ENDGAME.
What to watch today
** Key Data: SP Jan F CPI (08:00), EC Q4 P GDP (10:00), US Jan Retail Sales (13:30), US Jan Import Price Index (13:30), US Jan Industrial Production (14:15), US Jan Capacity Utilization (14:15) and US Dec Business Inventories (15:00)
** Key Events: Fed’s Logan speaks (20:00)
** Auctions: No major term auctions scheduled for Friday 14th Feb
** Earnings: 12 Stoxx600 and 2 S&P500 companies report
All times GMT
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