CREDIT OPEN: HY trades set to close out a slower week

EU stocks look set for minor gains to start the final session of the month and quarter.

That comes after modest advances for S&P500 (+0.09%) and Nasdaq (+0.30%) were enough to make it three wins in a row for Wall Street stocks while futures currently point to a potential fourth straight day of gains to end the quarter despite Nike falling sharply after hours having issued a sales warning.

Plenty of attention remained on FX overnight where USD/JPY hit a fresh 38yr extreme with DXY rising ahead of today's key PCE data where the core reading is expected to ease to its lowest level in over three years to +2.6% YoY.

Also getting lots of attention during Asian hours was the US Presidential debate where a weak performance by Biden appears to have sharpened the debate among party members and donors over a potential successor. Providing a reminder of the challenges that lay in store for whoever prevails in the November vote, the IMF urged the US to urgently tackle its rising debt burden.

Ahead of aforementioned US PCE update, this morning's data highlights comprise prelim inflation readings for June from several eurozone countries where annualised rates in France and Spain are seen easing while picking up slightly in Italy. German jobs data for June is also due.

Already out, UK final Q1 GDP was revised up to 0.7% from a prior estimate of 0.6%.

There's no supply on tap today but it will be worth watching rates again closely following another rough day for French debt on Thursday where the 10yr OAT/Bund spread traded as wide as 82bps ahead of this weekend's first round parliamentary vote.

Speakers include ECB's Villeroy along with Fed's Barkin, Bowman & Daly while ECB also releases 1yr/3yr CPI Expectations.

For more on latest developments see the European Breakfast Briefing.

Friday's supply prospects

A couple of well-rooted covered names remain in the pipeline ahead of today s month-end session, but they are unlikely to go on a Friday having put off pulling the trigger for more than two-weeks. HY names Purmo Group and Sunrise Medical are set to put the final touches to their deals though after roadshows this week, and add to the weekly single currency total that currently stands at EUR18.575bn.

** Banca Popolare dell Alto Adige EUR300m no grow 7yr covered

** Bendigo and Adelaide Bank EUR long 5yr covered

** Sunrise Medical EUR850m two-part; 7NC1 FRN at 3mE+375-400 & 7NC3 FXD at 6.5-6.75%

** Purmo Group EUR380m 5NC2 SLB at 9-9.25%

For the nineteenth week (out of 26), and the sixth month (out of six) this year, the Street once again underestimated the resolve of high-grade corporate borrowers to fulfil their financing needs regardless of whether the Fed cuts rates this year or not. 24 ex-SSA borrowers, overwhelmingly foreign, crowded into the market this week to raise USD31.95bn, topping all weekly estimates, including the highest one of USD30bn. See THE ENDGAME.

What to watch today

** Key Data: FR May Consumer Spending (07:45), FR Jun P CPI/PPI (07:45), SP Jun P CPI (08:00), GE Jun Unemployment Change (08:55), IT Jun P CPI (10:00), US May Personal Income/Spending (13:30), US May Price Index (13:30), US Jun MNI Chicago PMI (14:45) and US Jun F Uni of Michigan Sentiment (15:00)

All times BST

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