CREDIT OPEN: Pipeline thin but primary set to remain active
European stocks are seen opening slightly higher at today’s open after the Stoxx600 snapped a five-day winning run on Tuesday with a 0.45% loss.
Following that, Wall Street bourses ended an even longer eight-day run of gains, as players cashed in some chips before market moving event risk steps up a gear this week.
The softer tone was also evident in Asia on Wednesday and in particular China where the Hang Seng shed as much as 2% (before paring losses).
Tech stocks weighed amid some poor earnings and after JD.com Inc’s share price plunged amid Walmart Inc’s sale of its stake in the Chinese e-commerce firm.
There are no major economic data releases scheduled either side of the pond today, although eyes will be on Fed meeting minutes set to be released after European players log off this evening.
That comes ahead of the Jackson Hole Symposium which kicks off on Thursday and sees Fed Chair Powell speak on Friday.
Before that, Fed Governor Bowman said on Tuesday that if inflation continues to move towards the 2% goal, it will be appropriate to gradually lower rates. She highlighted further progress on inflation while also flagging upside risks from heightened geopolitical tensions, additional fiscal stimulus and immigration-driven housing demand.
Govvie supply comes Wednesday from the UK (GBP3.75bn 2027 Gilts) Germany (EUR4.5bn 2034 Bunds) and US (USD16bn 20yr Bonds) after yields ended up lower across the board on Tuesday.
For more on latest developments see the European Breakfast Briefing.
Wednesday’s supply prospects
Coming into the midweek session we have already seen the most weekly euro issuance of any week since the w/e 12-Jul, with the summer slowdown having now ended. A EUR15.65bn flurry on Tuesday put the weekly total at EUR21.95bn, and we don’t look to be done yet with a couple of names already sat in the public pipeline (below) and others said to be looking after the strong reception seen for Tuesday's deals.
** KfW EUR Oct 2029 green
** ADB USD 5yr global at SOFR m/s +40 area IPTs
** UPM-Kymmene EUR500m 10yr green
Kroger headlined proceedings in the US on Tuesday as it raised USD10.5bn through a 7-part offering all along the curve, to help fund its jumbo acquisition of Albertson. Kroger wasn’t the only ex-SSA game in town, though it did account for 88% of the day’s haul. For more colour see THE ENDGAME.
What to watch today - Fed Minutes
** Key Data: UK Jul PSNB ex-Banking Groups (07:00) and US Weekly MBA Mortgage Applications (12:00)
** Key Events: ECB’s Panetta speaks (12:00). FOMC Jul Meeting Minutes (19:00). US Democratic National Convention
** Auctions: UK to sell GBP3.75bn 2027 Gilts (10:00), GE to sell EUR4.5bn 2034 Bunds (10:30), US to sell USD16bn 20yr Bonds (18:00)
** Earnings: 5 Stoxx600 & 6 S&P500 companies release results
All times BST
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