CREDIT OPEN: Thinned out pipeline suggests a more measured pace

EU stocks look set to extend Wednesday's rebound in opening trade which follows yet another positive Wall Street performance which saw S&P500 (+1.02%) and Nasdaq (+1.18%) notch up fresh record highs and their seventh straight advance. US index futures currently suggest those gains are holding on final approach to today's key US inflation update.

Following that, the Nikkei also maintained its winning ways today with a fresh record high while Hang Seng and mainland China stocks are also higher on the first day of new short-selling restrictions that were approved by the CSRC on Wednesday.

Before we get to today's key UK data, UK May monthly GDP is seen indicating growth of 0.2% after the economy flatlined in April, while factory activity is also seen rebounding in May with industrial production expected at 0.3% vs a prior -0.9%.

US June annualised CPI is forecast to slow to 3.1% (prior 3.3%) but the core rate is not expected to budge from May's 3.4%.

Ahead of the US data, WIRP Futures implied probability of a Sep cut by the Fed hovering around 74% this morning, essentially unchanged on the week.

Speakers comprise Fed's Bostic and Musalem. Overnight, Fed's Cook said that economic data so far points to a soft landing.

Auction supply comes from the UK via GBP3.75bn 2031 Gilts and Italy via up to EUR8.5bn 2027, 2031 & 2043 BTPs while a USD22bn 30y sale closes out the latest US supply cycle.

For more on latest developments see the European Breakfast Briefing

Thursday's supply prospects

Issuance looks set to slow up again today given the US CPI print, but a handful of names remain in the pipeline. That after the European primary bond market continued its revival Wednesday where EUR9.6bn was issued in euros Wednesday versus Tuesday's EUR18.64bn. It could have been more, but having not provided an update since IPTs, Athene Global announced late in the day it was not proceeding with a EUR FA-backed 6yr. Despite Athene becoming the ninth euro postponement of 2024, the weekly IG single currency haul is already at EUR29.25bn, meaning with two sessions still to go we have beat the highest combined issuance estimate of EUR29bn given in our weekly issuance poll last week

** Bremen EUR500m no grow 7yr LSA

** ITM Entreprises from the Groupement les Mousquetaires EUR300-500m 5yr debut

** Banca Sella EUR300m 5NC4 snr pref

** Bendigo and Adelaide Bank EUR long 5yr covered

Only two issuers tapped the US market Wednesday for USD1.75bn, bringing ex-SSA issuance for the week to USD18.25bn, above the average weekly estimate of USD15bn, but not enough to breach the highest estimate of USD20bn. For more colour see THE ENDGAME.

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