CREDIT OPEN: Pipeline looking thinner after three day/EUR30bn flurry
EU stocks look set for a narrowly mixed start to Thursday’s session as thoughts turn toward the Fed’s Jackson Hole Symposium which gets underway later today.
Ahead of that, further gains in US stocks seen Wednesday leaves markets approaching the event with a considerable amount of good news already priced in to the extent that the S&P500 (+0.57%) got to within just 0.65% of its record high during yesterday’s session.
The catalyst for further gains came in the form of rising hopes for easier Fed policy after FOMC minutes of the July meeting revealed 'several' officials saw a case for cutting at the July meeting but the 'vast majority' think a September cut as more likely to be appropriate.
Also after EU hours yesterday, the US BLS released the 2024 Preliminary Benchmark Revision report, revealing a -818K adjustment to payrolls data for the year ended March '24, the largest markdown since '09 in preliminary data.
Today is PMI day where we get preliminary updates from core countries and also at the pan-Eurozone level with the latter seen showing a slight slowdown to 50.1 (from 50.2) at the composite level. UK & US also report equivalent data with the latter also releasing Jobless Claims & Existing Home Sales.
The ECB publishes its account of the July rate decision at 12:30 BST.
The European rate complex gets a break from auction supply while the US conducts a 30yr TIPS sale.
For more on latest developments see the European Breakfast Briefing.
Thursday’s supply prospects
The European primary bond market has got back into the swing of things this week following the summer slowdown with EUR30.1bn having priced in the single currency alone Monday to Wednesday. The pace looks as though it may slow today though with the public pipeline sparse and also given the distraction of the Jackson Hole Symposium. Just MuniFin is known to be readying a single currency trade (5yr) which comes with SSA borrowers having accounted for EUR12bn of this week’s euro total so far. Away from the single currency and IFC is the latest SSA to line up a dollar trade this week.
** MuniFin EUR 5yr
** IFC USD 4yr global FRN at SOFR +32 area IPTs
It appears Tuesday’s USD10.5bn Kroger deal may have been the last hurrah for August US ex-SSA high grade issuance, with only one – Rabobank’s USD1.25bln 2-part 2yr fixed rate and floating rate preferred issue – pricing during Wednesday’s session. That’s not to say we’ve seen the last of issuance for the month with seven viable trading sessions remaining. For more colour see THE ENDGAME.
What to watch today - PMIs & Jackson Hole
** Key Data: FR Aug P HCOB Composite/Manufacturing/Services PMIs (08:15), GE Aug P HCOB Composite/Manufacturing/Services PMIs (08:30), EC Aug P HCOB Composite/Manufacturing/Services PMIs (09:00), UK Aug P S&P Global Composite/Manufacturing/Services PMIs (09:30), UK Aug CPI Trends Total Orders/Selling Prices (11:00), US Jul Chicago Fed Nat Activity Index (13:30), US Weekly Initial/Continuing Jobless Claims (13:30), US Aug P S&P Global Composite/Manufacturing/Services PMIs (14:45), EC Aug P Consumer Confidence (15:00), US Jul Existing Home Sales (15:00) and US Aug Kansas City Fed Manufacturing Activity (16:00)
** Key Events: ECB Jul Meeting Minutes (12:30), Jackson Hole Symposium gets underway
** Auctions: US to sell USD8bn 30yr TIPS (18:00)
** Earnings: 12 Stoxx600 & 2 S&P500 companies report
All times BST
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