CREDIT OPEN: Hefty stock gains eyed as new month gets underway
EU stocks are set for hefty gains at the start of a new month as markets absorb the outcome of the weekend's first round vote in the French legislative elections in which the right-wing National Rally Party is predicted to come first with up to 34% of the vote although it is believed they will fail to win an outright majority at Sunday's second round.
With that, EUR/USD is trading at a 10-day high this morning while bund futures are deep in the red with OAT futures ahead, setting up some considerable narrowing in the 10yr OAT/Bund cash spread which hit a fresh long-term wide above 84bps on Friday before closing inside 80bps.
Over in Asia, Hang Seng was closed today and other markets are trading mixed while US index futures are in the green after S&P500 and Nasdaq both touched record highs intraday on Friday before closing lower to the tune of 0.12% & 0.41% respectively.
Ahead for today are French, German EC & UK June final Mfg PMIs while German national CPI is also due this afternoon, preceded by individual states this morning. Also due this morning is UK mortgage lending data whilst later in the day comes US ISM manufacturing.
Today's scheduled central bank speakers are ECB's Nagel & President Lagarde.
For more on latest developments see the European Breakfast Briefing
Monday's supply prospects
Given the current backdrop, it's no surprise that expectations over what to expect this week vary considerably. Our Friday poll suggested a EUR9bn average forecast but at the same time a zero-issuance week wasn't ruled out. Further complicating matters the more optimistic respondents anticipated as much as EUR17bn. See IGM's Euro Issuance Estimates (w/c 01-Jul-2024). That comes after last week produced a total of EUR19.805bn, which was broadly in line with the survey estimate (EUR20.5bn) but fell short of the previous week's tally of EUR21.83bn.
** Banca Popolare dell Alto Adige EUR300m no grow 7yr covered
** Bendigo and Adelaide Bank EUR long 5yr covered
Stateside, the Street once again underestimated the resolve of high grade corporate borrowers to fulfill their financing needs regardless of whether the Fed cuts rates this year or not. Twenty-four ex-SSA borrowers, overwhelmingly foreign, crowded into the market to raise USD31.95bn, topping even the highest weekly estimate of USD30bn. For a more comprehensive look at last week's issuance trends in the US primary bond market see IGM's IG WEEKLY WRAP UP.
What to watch today (and for the week)
** Key Data: SP Jun HCOB Manufacturing PMI (08:15), IT Jun HCOB Manufacturing PMI (08:45), FR Jun F HCOB Manufacturing PMI (08:50), GE Jun F HCOB Manufacturing PMI (08:55), EC Jun F HCOB Manufacturing PMI (09:00), UK May Mortgage Approvals (09:30), UK May M4 Money Supply (09:30), UK Jun F S&P Global Manufacturing PMI (09:30), GE Jun P CPI (13:00), US Jun F S&P Global Manufacturing PMI (14:45) and US Jun ISM Manufacturing/Prices Paid (15:00)
** Key Events: ECB Forum in Sintra, with Nagel (13:15) and Lagarde (10:00) to speak
** Auctions: No major term auctions scheduled for Monday 1st Jul
** Viewpoint - The week ahead:
- UK National Election (Thursday)
- ECB's Sintra conference (Monday-Wednesday). RBA mins (Tuesday)
- ... Riksbank/FOMC mins (Wednesday). ECB mins (Thursday)
- US May JOLTS (Tuesday). June ADP/Challenger/claims (Wednesday) Employment Report (Friday)
- EMU June CPI (Tuesday). May EMU unemployment rate (Tuesday), PPI (Wednesday), retail sales (Friday)
- German June CPI (Monday). May factory orders (Thursday), IP (Friday). Spain/France IP (Friday)
All times BST
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