CREDIT OPEN: Single currency supply set to ramp up

Those planning a go/no-go call this morning face a softer looking open for EU risk assets where European stocks look set to give back a portion of the hefty gains seen Monday during a holiday thinned session.

Overnight, with the exception of Hang Seng, Asian markets have generally been rising though despite a hefty drop in shares of Tencent after the US added the firm to its list of companies allegedly working with the Chinese military. In the rates complex, US yields are easing back after bear steepening action seen during Monday’s US session took the 30yr US yield up to a 14-month peak.

Turning to the day ahead and this morning’s data focus is on flash inflation updates for Dec for France, Italy and the euro-area where modest upticks in annualised rates are expected. Also due are ECB 1yr/3yr CPI Expectations for Nov.

Then it’s across the pond for the Nov JOLTs survey which is expected to show little change from Oct while ISM services is seen improving in Dec.

Auction supply is a major feature where sales from Austria, Germany and UK will compete with today's syndicated SSA offerings (see below).

Elsewhere, it’s a slow day for speakers where Fed’s Barkin will be alone.

For more on latest developments see the European Breakfast Briefing.

Tuesday’s expected supply

It was an all-sterling affair in the primary bond market on Monday, but euro paper is set to be back on the agenda Tuesday with market participation levels back up following yesterday’s Epiphany Day holiday. SSA heavyweights Belgium and KfW are known to be going today in the single currency, whilst we expect to see some supply across other asset classes in euros also. More sterling paper is on the way from BNG Bank, whilst another four SSA issuers are set to print dollars following Monday mandates. Full details below.

** Belgium EUR Jun 2035 syndicated

** Slovenia EUR 30yr

** KfW EUR Apr 2028 bmk & EUR3bn no grow Jan 2035 two-part

** ADB USD 3yr global at SOFR m/s +34 area IPTs

** EIB USD Mar 2030 global at SOFR m/s +45 area IPTs

** IBRD USD 7yr SDB at SOFR m/s +57 area IPTs

** DBJ USD500m no grow 10yr at SOFR m/s +78 area IPTs

** BNG Bank GBP 3yr at SONIA m/s +42 area IPTs

The 12 borrowers who jump-started 2025 US high-grade issuance last week, apparently had the right idea getting ahead of what is expected to be a very busy week, albeit a short one, with 23 ex-SSA borrowers bombarding the market with 50 tranches that produced USD38.45bn in new supply on Monday. That made it the sixth busiest ex-SSA issuance day on record. For more details see THE ENDGAME.

What to watch today

** Key Data: FR Dec P CPI (07:45), ECB Nov 1yr/3yr CPI Expectations (09:00), IT Nov Unemployment Rate (09:00), UK Dec S&P Global Construction PMI (09:30), IT Dec P CPI (10:00), EC Dec P CPI (10:00), US Nov JOLTS Job Openings (15:00) and US Dec ISM Services Index (15:00)

** Key Events: Fed’s Barkin speaks (13:00)

** Auctions: UK to sell GBP2.25bn 2054 Gilts (10:00), AS to sell EUR2.0125bn 2029 & 2071 Bonds (10:00), GE to sell EUR4.5bn 2026 Schatz (10:30) and US to sell USD39bn 10yr Notes (18:00)

All times GMT

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