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DAILY CLOSE: Pace slows, US CPI comes in lower than forecast

** European bond activity slowed considerably on Thursday amid the distraction of the latest US CPI print, with just two IG and another two HY names emerging after recent mandates. The quartet printed a combined EUR2.97bn to lift the weekly single currency supply haul to EUR33.87bn and the highest since the w/e 31-May (EUR35.82bn), with a Friday session still to go. For details of the deals from Bremen, Banca Sella, Rino Mastrotto and Rossini, see the IGM DAILY EUR NICS & BOOKS

** In non-covered FIGBanca Sella emerged from the pipeline, raising the expected EUR300m via its 5NC4 senior pref which pulled in a EUR600m book and landed 12.5bps inside 5% area IPTs. That brought this week s total to EUR8.05bn for which combined books have totalled a hefty EUR28.3bn. That s over double the EUR4bn average guess and above even the most optimistic EUR6bn forecast, but it could be something of a last hurrah before seasonal factors conspire to crimp activity going forward, a dynamic that may help to underpin secondary paper in coming weeks. See IGM s FIG SNAPSHOT

** SSA activity was back in the doldrums Thursday and that brought with it a very real sense that the summer lull might be just around the corner. German LSA issuance from Land Bremen was the only mover, emerging from the pipeline with a EUR500m 7yr which ultimately priced in line with IPTs of m/s +13. Orders were communicated during the latter stages of the process but looked a touch light at just EUR525m

** IG corporate borrowers stayed away from the bond market Thursday, but thanks to an active first half of the week we have already seen more supply than expected. The euro total for the asset class remained at EUR5.2bn from 8 tranches, more than the average estimate (EUR4bn) and also the highest guess (EUR5bn) given by participants in our weekly issuance poll. Offering encouragement to any other issuers looking to go ahead of earnings blackout, demand for the paper this week has totalled a hefty EUR21.3bn

Friday's primary prospects


** ITM Entreprises from the Groupement les Mousquetaires (unrated), a French leading independent retailer, and owner of several retail brands in France, including the prominent INTERMARCHE, has mandated Credit Agricole CIB and Societe Generale as Global Coordinators, and BNP Paribas, CIC and Natixis as Joint Active Bookrunners to arrange a series of fixed income investor calls commencing on 9-Jul. A debut EUR300-500m 5yr senior unsecured fixed rate transaction is expected to follow, subject to market conditions. New issue proceeds will be used for General Corporate Purposes and for the refinancing in part of the syndicated bridge facility provided in connection with the acquisition of Casino's stores. Comps here


** Bendigo and Adelaide Bank Limited (A-/A-/Baa1) delegated Barclays, Natixis and UBS Investment Bank on a EUR Long 5y Reg S (Bearer form) Soft Bullet Covered Bond transaction, backed by prime Australian residential mortgages. The Covered Bond is guaranteed by Perpetual Corporate Trust Limited and is expected to be rated AAA/Aaa


** Greenalia S.A appointed Clarksons Securities AS, Pareto Securities AS, and Nordea Bank Abp, filial i Norge on a EUR220m 5y senior secured green bond issue

** 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

Thursday's broader market developments

** European stocks traded higher for the entire session and with a notable, but ultimately short-lived spike coming on the back of the release of lower-than-expected inflation numbers from the US. The highly anticipated CPI figures showed a 3.0% YoY rise, lower than the 3.1% forecast and with the MoM reading actually coming in at -0.1%. That saw the aforementioned spike in equities, but more pertinently helped yields on government bonds lower across the board led by USTs, but trailed closely by EGBs (Gilts underperformed although did follow). Earlier in the day, data from the UK showed May's Monthly GDP firmed to 0.4% MoM (from 0.0% previously) and ahead of a 0.2% forecast. UK Industrial Production rose to 0.2% thereby missing the 0.3% forecast whilst Manufacturing Production pushed up to 0.4% MoM

** Stoxx600: Up as much as 0.81% in the immediate aftermath of US CPI. Gains earlier in the session were led by utilities and healthcare but the latter was replaced by advances in real estate (the laggard in the morning session) and consumer discretionary names as the day progressed

** Govvies: A complete turn-around after the US CPI numbers saw yields fall across the board. UST yields were 9.5-11.5bp lower across the curve with front-end outperforming. EGBs followed suit but with moves more muted, again the front-end outperforming. Gilt yields lower but with a more parallel shift exhibited

** Data:

- UK Jun RICS House Price Balance lower than expected at -17% (exp -15%, prev -17%)

- GE Jun F CPI in line with first reading at 2.2% YoY

- UK May Monthly GDP MoM above f/c at 0.4% (exp 0.2%. prev 0.0%)

- UK May Industrial Production MoM lower than estimates at 0.2% (exp 0.3%, prev -0.9%)

- UK May Construction Output MoM higher than forecast at 1.9% (exp 0.7%, prev revised up to -1.1%)

- UK May Trade Balance deficit larger than f/c at GBP-4.894bn (exp -2.85bn, prev -6.423bn)

- US Jun CPI lower than f/c at 3.0% (exp 3.1%, prev 3.3%)

- US Weekly Initial Jobless Claims lower than f/c at 222k (exp 235k, prev 239k)

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