CREDIT OPEN: Positive open eyed, more sat in the pipeline
European stocks are set for a mildly positive open today to follow losses Tuesday in the wake of heightened Ukraine/Russia tensions.
Despite that, Wall Street stocks advanced on Tuesday with traders appearing to conclude the unsettling headlines/threats about the use of nuclear weapons was mostly posturing.
US futures are also higher, getting a further shot in the arm from reports (via RTRS) this morning that Putin is open to talks on a Ukraine ceasefire deal with Trump.
It was a more negative session in Asia on Wednesday though with most regional bourses in the red, although moves were fairly muted.
Looking ahead to today and it is a busy day for central bank speak, whilst another key focal point will be Nvidia earnings which will be a major driver for sentiment for AI-driven Tech stocks, and comes after the Nasdaq advanced 1.04% on Tuesday.
On the data front and the UK CPI report for Oct will be out this morning. The market consensus sees the headline CPI climbing to 2.1% from 1.7% in Sep, largely in line with the BOE's Nov forecast of 2.2%. The rise in household energy bills will likely be the main driver. The all-important services inflation is expected to hold steady, but volatile factors may continue to surprise the market
Govvie supply comes from Germany this morning which is offering long-dated EUR2bn 2052 and 2053 bunds, which comes after yields fell across the board Tuesday amid the broader flight-to-quality.
For more on latest developments see the European Breakfast Briefing.
Wednesday’s supply prospects
The week’s volume booster, namely the European Union’s EUR7bn dual-tap that attracted bumper demand of EUR146bn yesterday, is now out the way – but more issuers are lining up today. That includes a trio IG corporate names (detailed below) which comes after the sector saw a combined EUR5.7bn price via 9 tranches in the first two days of the week. Another couple of SSAs are also present in the pipeline, whilst we expect to see some more opportunistic supply on Wednesday.
** Flemish Community EUR Jul 2034 tap
** BAD-WUR EUR1bn no grow 6yr LSA
** IDA USD 5yr SDB at SOFR m/s +48 area IPTs
** Goodman European Logistics Fund EUR300m (exp) 7yr green
** WORLDLINE EUR 5yr
** Prysmian SpA dual-tranche EUR 4yr and 7yr
The drop in Treasury yields Tuesday was welcome news for the four ex-SSA borrowers, fewer than we were expecting, who tapped the high-grade primary market. Combined the four – Lloyds Banking Group, National Australia Bank, Alibaba Group Holding and Vistra Operations – raised USD8.65bn to bring ex-SSA issuance for the week to USD19.75bn, just below the lowest weekly estimate of USD20bn. For more colour, see THE ENDGAME.
What to watch today
** Key Data: GE Oct PPI (07:00), UK Oct CPI/PPI/RPI (07:00), EC Sep Construction Output (10:00) and US Weekly MBA Mortgage Applications (12:00)
** Key Events: ECB’s Financial Stability Review (09:00). Fed’s Barr (15:00), Cook (16:00), Bowman (17:15) & Collins (21:00) speak, along with BoE’s Ramsden (16:00) and ECB’s Guindos (18:00), Stournaras (18:30) and Makhlouf (19:00)
** Auctions: GE to sell EUR2bn of 2052 & 2053 Bunds (10:30) and US to sell USD16bn 20yr Bonds (18:00)
** Earnings: 5 Stoxx600 & 4 S&P600 companies release results
All times GMT
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