CREDIT OPEN: Pipeline thinner, UK inflation and earnings on deck
EU stocks look set for a narrowly mixed start to follow back-to-back losses and further divergence with US markets which closed higher again on Tuesday and featured some notable rotation and/or broadening of the rally beyond tech. That propelled the Dow 1.85% higher to a fresh record with S&P500 and Nasdaq closing a respective 0.64% and 0.2% firmer.
The positive handover from Wall Street has failed to give a lasting lift to Asian stocks though with gold hitting a record high as attention fell on comments by Republican nominee Trump that questioned the US defense commitment to Taiwan. The bid in gold is also being partly chalked up to inflationary concerns stemming from a potential second Trump term although that assertion doesn't quite stack up with the recent drop in yields. Also to note, Trump (via BN), said he would not seek removal of Fed Chair Powell before the end of his current term which ends in 2026.
On deck this morning, UK annual CPI is seen moderating to a slightly below target 1.9% in June (from 2.0%), ahead of which the 2yr UK yield sank by another 8.5bps on Tuesday.
Later comes US industrial production for June while The Fed's Beige Book will emerge after the European close.
Fed speak comes from Barkin & Waller.
Earnings pick up and will provide an increasingly key input where 13 S&P500 firms report later today to follow the 9 Stoxx600 members that are updating investors this morning.
Supply comes from UK, Germany and US (details below).
For more on latest developments see the European Breakfast Briefing.
Wednesday's supply prospects
Wednesday looks the last day of the optimum issuance window this week given the distraction of Thursday's ECB verdict. Coming into today's session and the single currency haul stands at EUR10.59bn for the week, with that set to be added to today by a couple of IG and another couple HY names, at the very least.
** NRW.BANK EUR1bn no grow 10yr social bond
** Government of the Hong Kong Special Administrative Region of the People's Republic of China EUR 7yr green at m/s +90 area IPTs
** Affelou EUR560m 5NC2 secured at 6.5-6.75% IPTs
** TeamSystem EUR700m 7NC1 secured FRN at E +375-400 IPTs
Two more of the big six tapped the US market on Tuesday in the form of Wells Fargo and Goldman Sachs, which were joined by a deal from Oaktree Strategic Credit Fund. Their deals totalled USD7.9bn, bringing ex-SSA issuance for the week to USD26.6bn. See THE ENDGAME
What to watch today
** Key Data: UK Jun CPI/PPI/RPI (07:00), EC Jun F CPI (10:00), US Weekly MBA Mortgage Applications (12:00), US Jun Housing Starts (13:30), US Jun Building Permits (13:30), US Jun Industrial Production (14:15) and US Jun Capacity Utilization (14:15)
** Key Events: Fed's Barkin (14:00) and Waller (14:35) speak, whilst the Fed releases Beige Book (19:00). Republican National Convention
** Auctions: UK to sell GBP4bn 2029 Gilts (10:00), GE to sell EUR2bn 2052 & 2054 Bunds (10:30) and US to sell USD13bn 20yr Bonds (18:00)
** Earnings: 9 Stoxx600 & 13 S&P500 companies release results, Former includes Svenska Handelsbanken
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