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DAILY CLOSE: All Saints' Day means blank end to busier than expected week

** Issuers stayed away from the primary market on Friday amid the fallout from Thursday’s risk rout and with much of the continent observing the All Saints’ Day holiday. That left the overall weekly single currency haul at EUR25.125bn and still short of last week’s final EUR28.975bn. Of this week’s total IG issuers accounted for EUR22.75bn, comfortably more than the EUR19.5bn average guess recorded in our issuance poll. In terms of sectors, the IG corporate market led from the front with EUR10bn, mainly thanks to DSV’s EUR5bn six-part. For the full breakdown of this week’s single currency issuance by asset class and maturity, see IGM's WEEKLY VOLUME

** Despite the headline distractions elsewhere, IG corporates (those that weren’t in earnings blackouts) were able to comfortably access the primary market and secure some economic funding. The headline, of course, was the well flagged jumbo M&A-driven multi-tranche transaction from Danish transport and logistics company DSV A/S which in the end totalled EUR5bn and marked the joint-largest euro corporate trade of 2024. DSV provided the backbone of a EUR10bn single currency IG corporate week, which not only meant we beat the average EUR8bn estimate but also equalled the highest guess. In turn we also saw the sector’s largest weekly total since the final full week of Sep when EUR14bn (23 tranches) crossed the tape. See the See the IGM CORP WEEKLY for a full recap

** In the non-covered FIG space, supply picked up this week where the EUR6.75bn raised topped both the average (EUR4bn) and also highest (EUR6bn) guess. There was plenty of demand in aggregate (at EUR14.315bn) but the helicopter view masked some notable order book attrition encountered by several issuers while books on a couple of this week’s deals more than halved during execution. The extent to which that represents investors becoming a little more picky, or is symptomatic of broader indigestion, remains to be seen although markets look likely to be shielded from significant supply in the near term given next week’s high profile risk events while earnings season also continues where a further 11 members of the Stoxx banks index will report next week. Whatever the case, if this week is any guide, those who are considering a funding foray may be required to exercise greater restraint on pricing. See IGM’s FIG WEEKLY

** In euro SSAs there was little to write home about in terms of overall volumes with the headline EUR5bn figure flattered by the inclusion of EUR1bn in EM issuance (IsDB and Export-Import Bank of China) and a EUR1bn tap of an existing Apr 2029 green line from KfW. That left just EUR3bn of ‘new’ issuance with a solid performance from the Slovak Republic (EUR2bn, 10bn NIC & 3.75x covered) perhaps overshadowing a weak showing from Kommunalbanken (EUR500m 7yr) - which wasn’t fully covered & saw no spread compression from IPTs - and a less stellar than expected outturn from Agence France Locale (EUR500m 8yr sustainability). That may seem a little harsh since it achieved a 2.8x cover ratio but comes amidst an ongoing purple patch for French agencies that has seen them achieve an average 6.1x cover ratio in 2024. From the dollar market, European interest this week came from Swedish Export Corp (SEK) and the Kingdom of Belgium. The former came with a 2.5yr FRN where no books were disclosed (not usually a good sign) whilst the Belgium deal took a 10yr tenor and achieved a cover ratio of just 1.1x (compared to 2.2x for its 30yr priced in Apr 2024). See IGM's SSA WEEKLY

** In covered, a singular EUR1bn deal from La Banque Postale emerged this week, rounding off October activity and taking the total to EUR10.4bn. The 6yr social line was one of the week’s more successful deals, having attracted EUR2.1bn in demand on a 5bp compression and 2bp NIC. It takes the YTD figure to EUR155.25bn (vs EUR181.31bn this time last year). See the IGM COVERED WEEKLY

** There was a mixed reception towards this week’s EUR7.3bn worth of ESG offerings where some flew off the shelves (La Banque Postale Home Loans SFH, AFL) and others limped across the line (KfW, KBN). For the full, comprehensive breakdown see IGM's Europe Credit ESG Weekly

** Political and macro risk events are expected to limit supply where an average combined estimate of just EUR5.5bn was put forward for next week’s euro issuance (ex-HY). A fairly empty pipeline leaves the burden on opportunistic issuers to drive supply though SSAs are seen as likely to make up the majority of the week's issuance, See IGM's Euro Issuance Estimates (w/c 04-Nov-2024)



IGM Credit Excel spreadsheets and reports

** The IGM European Weekly Credit Overview is your comprehensive round-up of primary European new issue activity including pricing, order book information, new issue concessions and ISINs

** The IGM European Weekly Cheat Sheet provides proprietary intelligence on Euro primary market trends using various key data points in an easily digestible Excel spreadsheet. This includes Euro new issue volumes, average new issue concessions and book cover ratios across asset classes, as well as other key credit proxies

** The IGM Roadshow Calendar is your one stop window on who, when and where. The calendar view provides an instant snapshot of which days are already earmarked for meetings in a convenient PDF format, with clickable links that take you directly to the known schedule



IGM's legal notices

This week's tender announcements include CA Immobilien Anlagen (XS2248827771) and Bidvest Group (UK) Plc (XS2388496247).

You can find these and more on IGM's Legal Notices story look-up, where clients can access announcements on tenders, consents, exchanges and stabilisation notices.

For IGM's Legal Notices click here.



Friday's broader market developments

** European stocks bounced back from the large losses seen on Thursday in thinned-out conditions amid the All Saints' holiday on much of the continent. Wall Street was also on the up on the first session of November after a much lower than expected US Payrolls print (12k vs 100k f/c) saw participants ramp up Fed rate cut bets ahead of next week’s FOMC verdict. Also released Friday, UK Oct Nationwide House Prices showed a smaller than expected MoM rise of 0.1% whilst the final Manufacturing PMI number for Oct was revised lower to 49.9

** Stoxx600 up as much as 1.22% with best levels hit post-NFPs. All sub-sectors in the green with Energy stocks amongst best performing as Brent firmed up to 2.93% following reports that Iran is preparing a retaliatory strike on Israel from Iraq

** Govvies: EGB yields lower at the short end and higher at the longer end. Gilts got some relief after Thursday’s huge sell-off with all maturities lower at time of writing

** Data:

  • CH Oct Caixin Bank Manufacturing PMI beat at 50.3 (f/c 49.7, prev 49.3)
  • UK Oct Nationwide House Prices lower than exp at 0.1% (f/c 0.3%, prev rev to 0.6% from 0.7%)
  • UK Oct F S&P Global Manufacturing PMI revised down to 49.9 (prev 50.3)
  • US Oct Change in Nonfarm Payrolls big miss at 12k (f/c 100k, prev rev to 223k from 254k)
  • US Oct Unemployment Rate unch as exp at 4.1%
  • US Oct Average Hourly Earnings as exp at 4.0% YoY (prev rev to 3.9% from 4.0%), higher than exp at 0.4% MoM (f/c 0.3%, prev rev to 0.3% from 0.4%)
  • US Oct F S&P Global Manufacturing PMI revised up to 48.5 (from 47.8)
  • US Oct ISM Manufacturing missed at 46.5 (f/c 47.8, prev 47.2)



What to watch Monday (and for the week)

** Key Data: SP Oct HCOB Manufacturing PMI (08:15), IT Oct HCOB Manufacturing PMI (08:45), FR Oct F HCOB Manufacturing PMI (08:50), GE Oct F HCOB Manufacturing PMI (08:55), EC Oct F HCOB Manufacturing PMI (09:00), EC Nov Sentix Investor Confidence (09:30) and US Sep Factory Orders (15:00)

** Key events/speakers: ECB’s Holzmann speaks (13:00)

** Auctions: EU to sell up to EUR5bn 2029 & 2034 Bonds (10:30), US to sell USD58bn 3yr Notes (18:00)

** Earnings: 1 S&P500 & 20 S&P500 companies report

** Holidays: Japan Culture Day

** Viewpoint - The week ahead:

- Two key US events - the election (Tues) and the FOMC meeting (Thurs) with a 25bp cut priced in

- Other rate decisions include BOE and Riksbank (both likely to cut) and RBA and Norges Bank (both expected to remain unchanged)

- German factory orders (Wed) and Industrial Production (Thurs) along with various European PMI's, PPI and retail sales

- Canada jobs report (Fri)

- China trade data (Thurs) and PPI for October (Sat)

- Note that clocks change (go back an hour) in the US on Sun


All times GMT


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