CREDIT OPEN: Primary pace set to pick up
Current signs are that cooler heads may prevail today where EU index futures are slightly in the green and US equivalents are narrowly mixed to follow Monday’s tech-led drubbing seen as DeepSeek’s promise of a much cheaper AI model upended US tech and wiped 17% off the value of Nvidia.
Broader fallout saw Nasdaq close 3.07% in the red on Monday with tech jitters cascading into Asia today where Nikkei fell by up to 1.7% although China markets are closed for the Lunar New Year celebrations.
Otherwise to note, the tariff story is still very much in play. Overnight, Trump said that he wants tariffs “much bigger” than 2.5% while newly confirmed Treasury Secretary Bessent (via the FT) is pushing for universal levies to start at 2.5%. That’s been nudging US yields and DXY higher overnight.
Turning to today and it's a busier session for data releases although economic updates could play second fiddle to the tech and tariff stories currently dominating thoughts while markets are also making final position adjustments ahead of looming Fed and ECB verdicts.
Rates markets contend with a busy schedule of auction sales while Austria is set to be the latest visitor to the syndicate market.
Earnings are set to play a bigger role in dictating sentiment as markets attempt to gauge the extent to which the recent scaling of record peaks in some markets is justified.
For more on latest developments see the European Breakfast Briefing.
Tuesday’s expected supply
The pace of euro issuance looks set to increase on Tuesday, with a number of names sat in the pipeline (below) and ready to launch trades ahead of the looming FOMC and ECB verdicts on Wednesday and Thursday respectively. That follows a slow start to the new week for primary activity as a sharp drop in tech stocks weighed heavily on broader market sentiment. In the end, just four issuers offered euro paper for a total of EUR3.55bn Monday, as detailed in the IGM DAILY EUR NICS & BOOKS.
** Republic of Austria dual-tranche issuance of a new EUR 10yr and a tap of its Green RAGB 1.85% May-2049** SEK EUR 10yr
** IDF Mobilites debut EUR 20yr EuGB green
** German Federal State of Lower Saxony EUR1bn no grow 8.5yr LSA
** Severn Trent EUR 10yr sustainable
** Tyco Electronics EUR 8yr
** National Gas Transmission GBP 9yr
** BayernLB EUR Aug 2032 SNP
** Berlin Hyp AG dual-tranche EUR 4yr Mortgage Covered Bond and EUR 7.8y (Nov-32) Green Mortgage Covered Bond
** Novo Banco EUR500m no grow 5yr covered
In the US, Peruvian utility company Kallpa Generacion SA raised USD500m via a 7yr note offering, while another Peruvian entity Banco Internacional del Peru SAA Interbank sold USD350m 10.25nc5 subordinated Tier 2 notes. That brought ex-SSA issuance for the month to USD163.4bn, sort of dashing the hopes that we could see the USD26bn needed to reach the average monthly estimate of USD187.5bn. Not with a host of obstacles standing in their way. For more colour see THE ENDGAME.
What to watch today
** Key Data: FR Jan Consumer Confidence (07:45), SP Q4 Unemployment Rate (08:00), US Dec P Durable Goods Orders (13:30), US Nov FHFA House Price Index (14:00), US Jan Conf Board Consumer Confidence (15:00) and US Jan Richmond Fed Manufacturing Index (15:00)
** Key Events: ECB Bank Lending Survey (09:00). ECB’s Villeroy (09:30), and Cipollone (14:30) speak
** Auctions: NE to sell up to EUR2.5bn 2030 Bonds (09:00), UK to sell GBP1.5bn 2035 Linkers (10:00), IT to sell up to EUR3bn of 2027 Bonds, as well as EUR2.5bn 2029 & 2036 Linkers (10:00), GE to sell EUR5bn 2027 Schatz (10:30) and US to sell USD30bn 2yr FRNs (16:30) and USD44bn 7yr Notes (18:00)
** Earnings: 10 Stoxx600 & 17 S&P500 companies report
** Holidays: China LNY
All times GMT
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