CREDIT OPEN: Inflation data in focus on de facto month-end
EU stocks are set for a mildly negative start to Friday’s de facto month-end session that will also be an abbreviated one for cash US debt and equity markets. Those US players who are in the office could also be heavily distracted by Black Friday related activities.
Over in Asia, mainland Chinese stocks (CSI300) got a 2%+ bump higher today, chalked up to hopes that Beijing could take a softer stance against potential US tariffs. Elsewhere, attention fell on a hotter than expected core CPI print from Japan which fired up BoJ rate hike bets and JPY with the YoY Nov rate at 2.2% topping the 2.1% forecast and October’s 1.8% print.
Staying on the inflation theme and the spotlight now falls on this morning’s updates from France, Italy and eurozone. Re the latter, our rates team note that energy base effects are forecast to push headline inflation up 30bp to 2.3% YoY while the core is projected to rise 10bp to 2.8% YoY.
Otherwise on tap is French November consumer spend/PPI (7.45GMT), Spanish October retail sales (8GMT) and German labour market numbers (8.55GMT). ECB consumer inflation expectations (9GMT) are followed by UK October money supply (9.30GMT) which comes with mortgage approvals data.
Already out, German retail sales were weak in Oct at -1.5% MoM (exp -0.5%), almost entirely reversing Sep’s revised 1.6% rise.
Rates markets get a break from supply although will remain in the spotlight given the ongoing drama enveloping French debt where 10yr French yields briefly traded above Greek equivalents Thursday. That came as bond vigilantes continue to fire warning shots although French 10yr yields eventually closed a volatile session 7.3bps lower, outstripping a 3.4bps fall in Germany and also a 5.2bps fall in Greece.
On a related note, S&P Global is set to provide a rating update on France after close of business Friday and will be closely watched after both Moody's and Fitch cut their outlooks to negative on the sovereign last month.
ECB Governing Council members Guindos and Nagel are today's only speakers.
For more on latest developments see the European Breakfast Briefing.
Friday’s supply prospects
IG issuers stayed away from the primary bond market completely Thursday, with high-grade issuers so far this week having only printed EUR4.95bn in the single currency – well off the average EUR12.5bn estimate. HY paper was issued on Thursday though via Europi Property Group and Arrow Global and they put the overall weekly single currency total at EUR7.497bn. Another HY name in the form of Asmodee Group is set to print a EUR940m 5NC2 FXD and 5NC1 FRN two-part secured today, whilst the IG pipeline remains empty.
** Asmodee Group EUR940m 5NC2 FXD and 5NC1 FRN SSNs at 6-6.25% and E+400 talk respectively
** Azerion Group EUR300m max tap of the 10.029% Oct 2026 SSN
** Mohinder FinCo AB EUR175m secured FRN
What to watch today – Eurozone CPI
** Key Data: FR Oct Consumer Spending (07:45), FR Nov P CPI (07:45), FR Q3 F GDP (07:45), SP Oct Retail Sales (08:00), GE Nov Unemployment Rate (08:55), ECB Oct 1yr/3yr CPI Expectations (09:00), UK Oct Mortgage Approvals (09:30), IT Nov P CPI (10:00) and EC Nov P CPI (10:00)
** Key Events: BoE’s financial stability review (10:30). ECB’s Guindos (11:30) & Nagel (13:00) speak
** Auctions: No major term auctions scheduled for Friday 29th Nov
All times GMT
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