CREDIT OPEN: Immediate pipeline currently thin as event packed week gets underway
EU stocks are set to get the new week off to a constructive start although one gets the sense we could be anywhere by the end of a week which delivers a barrage of earnings and key data while political developments are also very much on the markets radar.
In particular, company news is huge this week where earnings come from 176 members of the S&P500 index and from 75 Stoxx600 firms.
US index futures are also ahead this morning which comes after Nasdaq hit a fresh record high Friday with a 0.56% daily gain enough to just tip the index into positive territory for the week (+0.16%), making for a seventh straight weekly gain. The S&P500’s six-week winning run came to an end though following a slender 0.03% loss on the day and 0.96% loss on the week.
Over in Asia, JPY is hitting 3-month lows this morning after the ruling LDP coalition failed to secure a majority at the weekend’s lower house election which now leaves PM Ishiba under pressure to resign while raising doubts over the pace of future policy tightening. Associated currency weakness has seen the Nikkei enjoy a knee-jerk rally but whether or not that strength holds on a longer-term basis remains to be seen.
Elsewhere, Brent is down >4% after Israel’s retaliation against Iran at the weekend avoided oil facilities.
Looking at the day in prospect and while the week delivers a flurry of key data releases, Monday’s session is devoid of top-tier data.
On the supply front, the US brings USD69bn 2yr and USD70bn 5yr notes while The Treasury borrowing estimates will also be released later.
Staying with the rates complex and it will be worth watching OATs this morning following news out after hours on Friday which saw Moody’s cut its outlook on France to negative citing fiscal concerns. That’s not a huge surprise though given that Moody’s current rating at Aa2 is a notch above S&P at AA-.
For more on latest developments see the European Breakfast Briefing.
Monday’s supply prospects
A combined average estimate of EUR19.5bn was put forward by survey respondents in our latest issuance poll, with a DSV six-part set to provide the backbone of that after a roadshow which concludes Tuesday. That after a busy week last week produced EUR23.3bn ex-HY supply with help from Italy's jumbo deal. See here for a full recap of last week’s activity.
** Takko Fashion EUR350m 5.5yr secured
The Street doesn't appear to be overly optimistic over a pickup in high-grade US corporate issuance this week. The most bearish of the respondents to our weekly issuance poll are looking for only USD10bn in new debt to be raised this week as earnings continue. Even the bulls are looking for no more than USD25bn to cross the tape. On average, the Street thinks we'll see no more than USD18bn before the week is out. See the IG WEEKLY WRAP UP.
What to watch today (and for the week)
** Key Data: SP Sep Retail Sales (08:00), UK Oct CBI Retail Reported Sales (11:00), JN Sep Jobless Rate (23:30)
** Key Events: ECB's Wunsch speaks (09:00)
** Government Auctions: US to sell USD69bn 2yr (15:30) and USD70bn 5yr notes (17:00)
** Earnings: 5 Stoxx600 and 10 S&P500 companies release results
- Fed in quiet period. UST borrowing estimates (Mon) & Quarterly Refunding Announcement (Wed)
- US Sep Jolts/Oct cons confidence (Tue), Q3 GDP (Wed), Oct PCE/claims (Thu), Oct Employment Rpt (Fri)
- UK Budget (Wed). Change in fiscal rules should allow for large ‘fiscal headroom’ increase
- BoJ to hold & publish new forecasts (Thu)
- EMU & Big Four Q3 GDP (Wed). German/Spanish Oct prelim CPI (Wed), EMU/France/Italy (Thu)
All times GMT
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