CREDIT OPEN: Spain and Finland set to drive another busy session
EU stocks are set for a firmer open on Wednesday, piggybacking on a firmer Wall Street close and also continued strength in US index futures seen following a big after-hours spike in Netflix after the streamer reported a record increase in new subscribers.
Over in Asia, the positive Wall Street close and optimism over expected AI investments by the Trump administration have been driving selective gains although China/HK markets are lower after Tump said he was still considering a 10% tariff on all goods from China.
Despite the latter, USTs have been holding around NY closing levels after yields closed lower for a third straight session as inflationary concerns eased on hopes of a more measured approach to tariffs. Whether those hopes are justified clearly remains to be seen though.
Turning to the day ahead and the data schedule remains light in Europe where this morning’s only release of note is UK public finance data for Dec. US data is second tier.
It’s a busier day for speakers as the WEF continues in Davos (20-24 Jan) where the line up includes ECB chief Lagarde.
Earnings are likely to provide a directional impulse to US markets where another 13 members of the S&P500 will report.
Auction supply is focused toward the longer end where Germany brings 2041 & 2044 Bunds while the US offers 20yr bonds that will compete for attention with today’s syndicated sovereign sales from Spain and Finland (see below).
For more on latest developments see the European Breakfast Briefing.
Wednesday’s expected supply
Spain (EUR Apr 2035) and Finland (EUR3bn long 20yr) are set to be the next sovereign cabs off the rank Wednesday, to follow a bumper session on Tuesday that was led by France and the UK. The former’s May 2042 OAT was ultimately sized at a record-breaking EUR10bn having attracted all-time high investor interest of EUR134bn, whilst the UK’s GBP8.5bn 2040 tap also saw record-breaking demand of GBP119bn (recap here). Spain and Finland are just two of a number of issuers readying deals on Wednesday, with the packed pipeline suggesting plenty of variety will be on offer.
** Spain EUR Apr 2035 syndicated
** Finland EUR3bn no grow Apr 2045
** Bremen EUR500m no grow 8yr LSA
** Istituto per il Credito Sportivo e Culturale EUR300m 5yr social
** SNCF GBP 30yr green
** CDC USD 3yr at SOFR m/s +58 area IPTs
** FMO USD500m no grow Apr 2028 at SOFR m/s +39 area IPTs
** OPEC Fund USD 3yr at SOFR m/s +68 area IPTs
** Hamburg Commercial Bank EUR 5yr snr pref
** Credito Agrícola EUR300m (exp) 5NC4 Social snr pref
** DZ Hyp EUR 7yr covered
** ITM Entreprises EUR 5yr
** Sudzucker EUR 7yr
** J Sainsbury GBP dual-tranche long 5yr and 10yr tenors
** Elior Group EUR500m 5NC2 at 6.25-6.5% IPTs
** ContourGlobal Power EUR/USD 5NC2 green secured two-part
** Flora Food EUR250m tap of 6.875% Jul 2029 Senior Secured at 102 area (+/-0.25pts) IPTs
Stateside, just when we thought we had seen the end to “big six” bank issuance in the US, for now – all six tapped the primary market last week raising USD36.9bn in the process – Goldman Sachs came back for a second helping Tuesday. Last week the bank raised USD1.9bn via a PNC5 preferred issue. Yesterday they raised an additional USD8.5bn through a four-part offering of fixed-to-floating and floating rate notes, making them the largest “big six” issuer of the first round this year. However, they were not alone as Royal Bank of Canada raised USD4.25bn via a mixture of floaters and F-T-Fs, whilst there was a USD500m 10NC5 subordinated note offering from Bank of New Zealand. For more colour see THE ENDGAME.
What to watch today - ECB speakers in Davos
** Key Data: UK Dec PSNB ex-Banking Groups (07:00), US Weekly MBA Mortgage Applications (12:00) and US Dec Leading Index (15:00)
** Key Events: ECB’s Villeroy (09:15), Knot (10:30), Lagarde (15:05) and Nagel (18:30) speak in Davos
** Auctions: GE to sell EUR2bn 2041 & 2044 Bunds (10:30), US to sell USD13bn 20yr USTs (18:00)
** Earnings: 13 S&P500 companies release results
All times GMT
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