CREDIT OPEN: Verallia set to lift the weekly tally
EU stocks are set for a weaker start to Friday’s session as markets absorb the latest volley of earnings updates which come from 23 Stoxx600 firms today.
Over in Asia, markets traded mixed today with Nikkei falling ahead of this weekend’s parliamentary elections. US index futures are narrowly mixed while US yields have eased a little further with the 10yr rate dipping to 4.17% vs the 3-month high of 4.256% hit Wednesday.
Ahead of that Wall Street closed higher Thursday, led by tech, with Tesla surging 21.9% after issuing a bullish outlook.
This morning’s data focus falls on German IFO where the Business Climate reading is expected to rise very slightly in Oct while the ECB's 1yr & 3yr CPI Expectations for Sep are both seen moderating to a respective 2.6% and 2.2%. In the US, the spotlight is on Sep prelim durable goods.
In the rates complex, Italy brings 2026 BTPs and also longer dated linkers which follows Tuesday’s blowout 2-part syndicated sale which pulled in EUR200bn of total demand, almost half of which was directed at the EUR3bn 2054 tap to generate the biggest ever cover ratio on a EUR sovereign sale at 33.67x.
Also to note, Moody's releases it review of France this evening.
Otherwise, it will be worth watching gilts which underperformed sharply Thursday on reports that UK Chancellor Reeves will increase extra borrowing headroom by up to GBP50bn in next week’s budget. Released overnight, UK consumer confidence (via GfK) fell to its lowest level seen this year with the Oct reading falling to -21 vs a prior -20.
Speakers comprise Fed's Collins and ECB's Villeroy while It’s a slower day for earnings in the US where updates come from just 4 S&P500 firms.
For more on latest developments see the European Breakfast Briefing
Friday’s supply prospects
Coming into Friday’s session, total euro supply for the week stands at EUR26.63bn, with that tally likely to get a slight lift today afer Verallia SA wrapped up calls on Thursday ahead of a planned 8yr benchmark. Notably, HY rated corporates have accounted for EUR4.8bn this week’s total supply (via 9 separate issues) marking the biggest week for the sector this year, according to our records.
** Verallia SA EUR 8y Reg S Bearer, Senior Unsecured offering
Stateside, following a blank on Thursday, the week currently sits at a paltry USD12.1bn (ex-SSA), making this the fifth slowest issuance week of the year. For more colour see IGM's THE ENDGAME.
What to watch today
** Key Data: FR Oct Consumer Confidence (07:45), SP 3Q Unemployment Rate (08:00), SP Sep PPI (08:00), GE Oct IFO Business Climate / Current Assessment / Expectations (09:00), IT Oct Consumer Confidence Index (09:00), IT Oct Manufacturing Confidence (09:00), IT Oct Economic Sentiment (09:00), EC Sep M3 Money Supply (09:00), US Sep P Durable Goods Orders (13:30), US Oct F U. of Mich. Sentiment (15:00)
** Key Events: Fed's Collins (16:00), Villeroy, Armand speak in Washington (21:10)
** Government Auctions: Italy to sell up to EUR2.5bn 3.1% 2026 bonds and EUR2.5bn 2036 & 2040 linkers (10:00)
** Earnings: 23 Stoxx600 and 4 S&P500 companies release results
All times BST
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