CREDIT OPEN: Pipeline thin, spotlight on earnings and data

EU stocks look set for a narrowly mixed start to today's earnings laden session, at the end of which we’ll have heard from a whopping 35 Stoxx600 and 40 S&P500 firms.

Asian markets are mostly lower today to follow a weak Wall Street close although US index futures are currently ahead with help from an after-hours jump in Tesla which beat profit forecasts and issued an upbeat outlook.

In the rates complex, 10yr US yields eased back overnight from the 3-month highs above 4.25% hit on Wednesday amid ongoing angst over fiscal concerns and political uncertainty where polls continue to show that the outcome of the US presidential election is too close to call.

With that, divergence between EGB and UST yields (notably at the front end) was a key feature during Wednesday’s trade as bets increased on an outsized cut by the ECB in Dec in the wake of dovish comments from some ECB officials.

Looking at the day ahead and following several sessions without market-moving data, the pace picks up today where the spotlight falls on a swathe of October PMIs releases from European countries, including France and Germany, ahead of the overall reading for the bloc. UK and US equivalents are also due out, while the US will also release the usual weekly update on jobless claims and also new home sales.

Today's US data comes after the Fed’s Beige Book revealed only flat to modest growth across most of the US, with more than 50% of the 12 districts reporting “slight or modest” growth in employment, while the majority reported that prices increased by a “slight or modest pace".

Speakers comprise BoE chief Bailey and ECB eco Lane but both come after European hours.

The EGB complex gets a break from auction supply while the US sells USD24bn 5yr TIPS.

For more on latest developments see the European Breakfast Briefing

Thursday’s supply prospects

After a further eight issuers hit the euro market Wednesday, the known pipeline of immediate prospects is currently looking thin. However, with recent deals having attracted solid demand, opportunistic supply cannot be ruled out.

** Almaviva S.p.A, EUR700m 6NC2 144A / RegS Senior Secured Notes. IPTs: Low to Mid 5%

Stateside, ex-SSA issuance for the stands at USD12.1bn, still not enough to bring issuance for the week up to the average expectation of US23bn, let alone the most bullish estimate of USD35bn. That comes after the high-grade primary market narrowly escaped recording its eighteenth “zero” ex-SSA issuance day of the year on Wednesday thanks to midsized annuity provider SBL Holdings who, after holding investor calls on Monday, raised USD650m through a 10yr note offering. For more colour see IGM's THE ENDGAME.

What to watch today

** Key Data: FR Oct Mfg Confidence (07:45), FR Oct P HCOB France Services / Mfg /Composite PMI (08:15), GE Oct P HCOB Germany Services / Mfg / Composite PMI (08:30), EC Oct P HCOB Eurozone Services / Mfg /Composite PMI (09:00), UK Oct P S&P Global UK Services / Mfg / Composite PMI (09:30), US Sep Chicago Fed Nat Activity Index (13:30), US Oct 19 Initial Jobless Claims (13:30), US Oct 12 Continuing Claims (13:30), US Oct P S&P Global US Services / Mfg / Composite PMI (14:45), US Sep New Home Sales (15:00)

** Key Events: Fed's Hammack (13:45), BOE's Mann (14:00), ECB's Kazaks (14:00), ECB's Lane (18:00), BoE's Bailey (20:45)

** Government Auctions: US to sell USD24bn 5yr TIPS (18:00)

** Earnings: 35 Stoxx600 and 40 S&P500 companies release results

All times BST

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.