DAILY CLOSE: Monday's focus on sterling market as duo print
** Single currency issuance is expected to pick up this week, with an average supply estimate of EUR20.5bn put forward by respondents in our latest survey although we have started with a blank due to the Armistice/Veterans Day holiday. Sterling supply was on the menu though thanks to NatWest (GBP500m 5yr Senior OpCo) and KfW (GBP300m Dec 2026 tap), as detailed in the IGM DAILY GBP NICS & BOOKS. Elsewhere, the pipeline started to grow on Monday ahead of the imminent resumption of euro supply
** In unsecured FIG, NatWest Markets Plc tested demand for GBP paper for the first time since before the UK budget which unleashed considerable volatility in the underlying gilt complex. Natwest proved that investors do have money to put to work in the sector where demand for the GBP500m 5yr Senior OpCo peaked and finished at GBP1.7bn, allowing the issuer to print at gilts +90 from a +110 area starting point. The deal marked NatWest’s first sterling of the year and extended its existing curve from a GBP800m 6.375% Nov 2027 line which launched in Nov 2022 and was spotted by leads at G +79 bid ahead of the new offering. Elsewhere, Athora Nederlands joined the pipeline on the day, mandating leads for calls on Monday and Tuesday ahead of an expected EUR300m PNC7 RT1 trade
** Contributors to our weekly issuance poll were calling for an average of EUR8.5bn of euro IG corporate paper to cross the tape, with the most pessimistic seeing just EUR2bn being issued and the most optimistic a bumper EUR12.5bn. If we were to hit the latter, then that would market the sector’s seventh biggest single currency week of the year. We started with a blank amid the holiday, but one borrower known to be wanting to go this week is Germany’s KION GROUP which started a two-day roadshow Monday ahead of a EUR500m no grow 7yr. See the IGM CORP SNAPSHOT
** The pace in SSAs was pretty much in line with lacklustre expectations. KfW made some small tweaks to its annual funding with a GBP300m tap of a Dec 2026 line - books looked pretty robust for a sterling tap coming in at GBP550m and pricing was in line with IPTs at SONIA m/s+28. Looking to potentially be Tuesday's solo issuer Eurofima mandated banks for a new long 10yr Green that will be sized at EUR500m
** 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
Tuesday's primary prospects
SSA:
** EUROFIMA (Aa2/AA/AA) appointed BARCLAYS, Bofa Securities, Credit Agricole CIB, J.P. Morgan and Natixis as joint lead managers for a forthcoming EUR500m no grow green senior unsecured fixed rate long 10yr benchmark due Jan 2035
** 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
Monday's broader market developments
** European stocks made gains in what were thinned-out conditions amid the holiday in parts of Europe (Armistice Day) and the US (Veterans Day). Nothing in the way of key data/risk events to drive sentiment Monday (unlike last week!), with attention instead turning to later in the week where US CPI comes on Wednesday while China releases its usual data dump on Friday. US stocks also opened higher with last week’s rally driven by hopes of tax cuts and easier regulation continuing. Asian markets continue to dance to a different beat though where Monday’s session was a mostly defensive one for major regional stocks where Hang Seng led declines amid concerns that stimulus measures could prove insufficient
** Stoxx600 gains as much as 1.43%. All sub-sectors in the green, led by Industrial stocks
** Govvies: EGB yields rally across the board although come off lowest levels as morning progressed. BTPs outperform slightly
What to watch Tuesday – Lots of central bank speak
** Key Data: GE Oct F CPI (07:00), UK Sep ILO Unemployment Rate (07:00), UK Sep Average Weekly Earnings (07:00), UK Oct Payrolled Employees Monthly Change (07:00), GE Oct ZEW Survey (10:00) and US Oct NFIB Small Business Optimism (11:00)
** Key Events: ECB’s Rehn (08:00), Centeno (09:00) & Cipollone (14:00), BoE’s Pill (09:00), as well as Fed’s Waller (15:00), Barkin (15:15 & 22:30), Kashkari (19:00) & Harker (22:00) speak
** Auctions: NE to sell up to EUR2.5bn 2029 Bonds (09:00), UK to sell GBP2.25bn 2043 Gilts (10:00) & GE to sell EUR5bn 2026 Schatz (10:30)
** Earnings: 13 Stoxx600 & 6 S&P500 companies report
All times GMT
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