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THE ASIA-PAC SESSIONTreasuries have headed higher in Asia, trimming some of the bear steepening move from Monday, with participants seen happy to retain the bulk of the recent retreat in Treasury yields amidst speculation that tariffs may be eased since their unveiling on "Liberation Day" last weekTYM5 is +0-03 at 112-05 on above-average volume of ~250K lots, operating right around fresh session highs, operating around the top of a 0-16+ range established since the open. The contract closed 0-31+ lower on Monday, more than unwinding the gains seen last Friday (in the wake of US NFPs for Mar - although recalling that focus then had also been centred around tariff-related matters), trimming a large chunk of last week's gains in the processOf note during the session, China's commerce ministry said that it "will never accept" the additional 50% levy, and that "China will fight it to the end", noting that US president Trump has said that he will impose an additional 50% tariff on Chinese goods (total will be 104%) after China announced their own retaliatory tariffs late last weekUP NEXTLooking ahead, only the NFIB Small Business Optimism gauge for Mar will be released (1000GMT). Fedspeak will be solely headlined by San Fran Fed Pres Daly ('27 voter, 1800GMT), who will be participating in a discussion on the economic outlookThe Treasury will sell $58bn of 3-Year Notes later today. Further into the week, markets will be eyeing the sale of $30bn of 10-Year Notes (Wednesday, reopening sale), and $22bn of 30-Year Notes (Thursday, reopening sale)THE DAY THAT WASTo recap Monday's moves, cash Treasuries went out 11.0-22.5bp cheaper across the curve, bear steepening as the front end had underperformed, undoing a chunk of their recent richening. There wasn't much by way of major US data releases due for the day, while there were also no sales of Treasuries scheduled as well (starts on Tuesday). Focus was instead on tariff-related matters, recalling that markets had returned to comments by US president Trump and administration officials that US tariffs would remain in place for now as the US economy requires "medicine" to get better over time - implying a period of painApart from that, there was some evident attention given over to shifts in US stocks, with risk appetite seen regaining some poise - ICYMI, reports of (false) NEC Director Hassett saying that there would a 90-day stay on tariffs saw US equity index futures briefly surge into the green - reversing their losses for the day, although confirmation from the White House that this was not on the cards unwound most of that move higher. In any case, e-minis closed flat to a little firmer on the day, regaining some poise after their recent, well-documented sell-offChicago Fed Pres Goolsbee ('27 voter) said that recent economic data was still "pretty good" and warned that a return of the inflationary impulse in '21/'22 may return should tariffs come in "as big as what are threatened on the US side, and if there's massive retaliation, and then if there's counter retaliation". In all, does point to an incremental pullback of recent comments from Fed speakers essentially downplaying any potential inflationary impact of tariffs - recalling that Fed Chair Powell had deemed it "transitory" some weeks backACGBsACGBs are off lows but run comfortably cheaper at writing, having retained much of the cheapening impulse derived from the losses in Aussie bond futures overnight, tracking broader moves in US Treasuries in any case. YM is -10.0, up from its overnight close, having risen decently away from its overnight low (-28.0). XM is -15.5, itself extending a limited rise away from its own overnight low (-24.5). Bills run 5 to 10 ticks cheaper through the reds, bear steepeningThe Westpac consumer confidence reading for Apr showed a predictable cratering in consumer sentiment, with the gauge seen falling to a six-month low, dragged by worry re: tariffs, as well as a sell-off in stocks. Part of the cratering in consumer sentiment was also to do with reduced confidence towards the prospect of further RBA rate cuts, although this may change in the coming months given the evolving outlook on that front (Westpac report here)Apr Westpac Consumer Confidence -90.1; Mar 95.9Apr Westpac Consumer Confidence -6.0% M/M; Mar +4.0%On the topic of RBA rate cuts, STIR markets are pricing in ~35bp of cuts to the cash rate target come the RBA's 20 May monetary policy decision, pointing to ~40% odds of a 50bp rate cut (vs a 25bp rate cut) at that meeting, with most participants judging that the RBA is unlikely to keep rates on hold at that meeting given progress towards bringing inflation down, as well as uncertainty around the outlook. Note that only ~17bp of cuts for the May meeting had been priced in last MondayLooking further out, a cumulative ~110bp of rate cuts is priced in through to end-'25, pointing to decent speculation re: at least five 25bp rate cuts this year, with back-to-back 25bp cuts expected in May, Jul, Aug, and SepApart from that, NAB released its monthly business survey for Mar, showing marginal deterioration in business confidence, remaining in the red for a second straight month, while reported own conditions improved slightly (albeit on a marginal downward revision to the Feb figure). NAB highlighted that "conditions remain strongest in the services sector and weakest in manufacturing and retail", while "confidence remains in negative territory and well below the long-run average". NAB also flagged that these figures were collected before the reciprocal tariff announcements on 2 Apr, with the impact of that event expected to "flow through to forward looking measures in the next survey." All in all, NAB concluded that "Businesses remain cautious about the outlook, with confidence and conditions both below average" (NAB report here)Mar NAB Business Confidence -3; Feb revised -2, was -1Mar NAB Business Conditions +4; Feb revised +3, was +4NZGBsNZGBs are off their early cheaps but run obviously much softer on the day, tracking moves in core global bonds from Monday. Cash NZGBs run 6.0-14.5bp cheaper across the curve, bear steepening. There has been nothing by way of major domestic data releases scheduled for today, leaving focus squarely centred around offshore matters (tariffs!), while the RBNZ's monetary policy decision will also be on the minds of some (due on Wednesday at 0200GMT - most expect a 25bp cut)2-Year NZGB yields are at ~3.32%, rising away from near-2.5-year lows made on Monday10-Year NZGB yields are at ~4.49%, up sharply from Monday's six-month low of ~4.22%On RBNZ matters, OIS markets are continuing to more or less fully price in a 25bp cut to the OCR when the RBNZ issues its monetary policy decision on Wednesday (~29bp of cuts priced in, was ~24bp just a week ago), with ~15% odds of a 50bp rate cut seen. A cumulative ~108bp of cuts is priced in through to end-'25, pointing to fully priced in odds for at least four 25bp rate cuts this year, with ~30% odds for a fifth (or at least one 50bp cut)Keeping domestically, Finance Minister Willis said today that "New Zealand exporters should remain competitive overall" despite the recent imposition of tariffs. She flagged that the largest threat to NZ will be "through disruptions to the global economy" and said that "there is a risk of slower growth in the region because many economies there have significant exposures to the new US tariff regime". She said that should tariff retaliation escalate further, "there will be further impacts on growth in these countries and potentially therefore demand for New Zealand's products"All in all, Willis said that "the past week's global developments make our recovery harder", and that "these factors will also impact the government books with potential impacts for revenue, debt, inflation, and interest rates". She stated that the government will "stick to our fiscal strategy", and seek to avoid exceeding operating allowances forecast back in the HYEFUWillis also said that the NZ Treasury now places economic growth amongst trading partners at 2.0% in the year through to Jun '26, down from +2.5% previously seen in the HYEFUFurthermore, higher world prices for NZ imports compared to export prices "will reduce the terms of trade, which in turn affects profitability"On issuance matters, she noted that the Treasury is "ahead of the run rate required to complete this year's bond issuance programme" - and generally expressed little worry re: matters on that frontJGBsJGB futures are -107 ticks at 141.20 in the second half, returning back to around its overnight close following the release of results from a poorly-received sale of 30-Year JGBs, although overall post-auction moves have remained rather scant. JGB futures have ultimately kept within the confines of its overnight range all throughout Tokyo dealing, noting that it had come close to a breach of its overnight low (at 140.69) at one point in pre-lunch session. 10-Year JGB yields are at ~1.23%, up from ~1.03% seen at one point on Monday, although still marking a sharp retreat from ~1.58% seen just towards the end of MarchThe latest sale of 30-Year JGBs drew soft demand, with cover seen at 2.96x (vs 3.50x prev.), far below the prior six-auction average of ~3.53x, while the low price came in a decent chunk below wider expectations (99.00 vs 100.00 per the BBG dealer poll). The spread tail also widened significantly, further signalling weakness in demand. Some participants likely (understandably) have remained sidelined amidst recent fluctuations in core global bond yields (and JGB yields), while the relatively low yield on offer (when compared to yields seen just a couple of weeks ago) was also widely expected to have negatively impacted demand ahead of the saleLooking domestically, economic revitalisation minister Akazawa said earlier that it is not true that the Japanese government is currently working on an additional budget, recalling that there had been some speculation re: the matter in recent weeks after relevant source reporting. Commenting on current tariff matters, he said that he agrees with PM Ishiba's assessment that it is a national crisis, and said that the government is still assembling a team to lead trade talksWhile local outlet FNN had said earlier that Akazawa will be leading trade talks, he has since denied that he has been picked (at least not yet). FNN reported that US Treasury Sec. Bessent and USTR Greer will lead any US delegation in negotiationsFinMin Kato had also come out earlier in the Tokyo day to say that speculation re: an additional budget was also wrong. He also said that the FSI and the Finance Ministry are setting up a task force on tariffs---- Subscribe to read more ----To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

IGM Global Credit Snapshot - June 202314 July | By Gavin Kendrick

EUR/USDUSD/JPYGBP/USDEUR/JPYEUR/GBPAUD/USDUSD/CADOPEN1.1015142.791.3047157.300.84410.66901.3570HIGHLOWCLOSE1.1010141.431.3014155.730.84600.66351.3610EUR/USD takes centre stage today.Trading near the bottom of its recent 1.1155 - 1.1002 range, the ECB is widely expected to lower its key rate by -25BPs to 3.5%, but it’s expected to deliver minimal guidance on the pace and extent of further action with inflation not yet fully defeated.It will be interesting to see whether Lagarde makes any concessions to recent much slower inflation results or she continues to worry on stubbornly persistent price pressures, particularly in the services sector, where wages are still rising materially.Once again USD/YEN enjoys a surge of dip demand, tentatively bottoming at Nakagawa's inspired 140.71 low yesterday to a rebound high of 142.95 overnight even as BOJ Board Member Tamura indicated the Bank needs to raise its benchmark rate more aggressively than many economists have been expecting, noting that the neutral policy rate in Japan is 1% or higher. However, perhaps there was some negative YEN response to the first slowing in Japan PPI in eight months in August at 2.5% y/y vs the 2.8% forecast and 3.0% result the month previous.Also today and at the top of the hour is the Swedish CPI report for August. CPIFis seen at 1.4% y/y vs 1.7% the month previous, with CPIF ex-energy staying at 2.2% y/y. The data is unlikely to derail the Riksbank’s easing plans as price gains will likely remain well contained below the 2.0% target rate into 2025.On a key day, can EUR/SEK continue to hold above its 200-dma, at 11.4007 last?In the second half, US PPI and initial claims lead.PPI should follow a similar path to CPI, with 0.1% m/m and 1.7% y/y estimates, with the core also expected unchanged at 2.4% y/y. Airfare prices continue to weigh, but health care is expected to stay sticky, particularly in October and likely adjustments to Medicare reimbursement rates. Claims are seen unchanged at 227k.Note SNB's Jordan is a scheduled speaker, this afternoon, too.Elsewhere, all US stock futures are small in the green at the time of writing, led by the +0.2% NASDAQ.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

EUR/USDUSD/JPYGBP/USDAUD/USDUSD/CADDOWDXYOPEN1.0423157.121.25450.62871.4302+309.00107.89HIGHClosedLOW@CLOSE1.0306157.271.24300.62181.444442,702.05108.95The Dollar has had to beat a retreat after the Washington Post reported that President-elect Trump's aides are exploring the possibility of a universal tariff plan. In that scenario, tariffs would be applied to every country, but only cover critical imports. This has brought relief to currencies like the Euro and the Loonie which have been seen as being targets for the new Trump administration. Remember last month, Trump promised last month to slap a 25 per cent tariff on all goods entering the U.S. from Canada and Mexico on January 20th.Eur/Usd was already enjoying a minor bid tone before the Washington Post news broke, after minor upward revisions to the EZ final services and composite PMIs, as well as a large jump (to 2.7% y/y from 2% y/y) in the German state of Hesse's CPI print. So far 1.0432 has been the high, compared to last Thursday's lows down at 1.0226.Usd/Cad has fallen all the way back to pre-Fed levels down at 1.4300. The Loonie was also in demand before the tariffs story, on speculation that Canadian PM Trudeau could announce his resignation as early as today. Newspapers in Canada are speculating that Trudeau could quit as the head of the ruling Liberal Party ahead of an emergency meeting of party members on Wednesday, "so it doesn't look like he was forced out by his own MPs."Disillusionment has been growing within the ruling Liberal Party for a while now, with recent polling showing that their support was down to just 16%, their worst pre-election standing in more than a century. A spring election is now seen as likely, although it is unclear whether Trudeau will stay on as PM until a new Liberal leader is selected.Usd/Jpy has been unaffected by the Dollar weakness, after the BoJ Governor Ueda stated that the central bank will raise its policy rate if economic conditions continue to improve this year, reiterating his existing stance.The timing of rate adjustment will depend on the economy, inflation and financial conditions. Ueda hopes wages and prices will rise in a balanced manner in2025, with momentum for wage hikes a key point when considering a rate hike and uncertainties are high regarding US economic policies.Over the weekend the Fed's Daly and Kugler both suggested that the Fed’s inflation fight isn’t over and there’s more work to be done to reach the 2% goal, with the former remarking pricing remains “uncomfortably above our target.”In China, the Caixin services PMI expanded at the fastest pace since May, at 52.2 vs the 51.4 consensus and 51.5 result the month previous, indicating improving domestic demand following the admin's economic support package. Meanwhile, the PBOC set its Yuan reference rate at 7.1876 and considerably stronger than the psychological 7.2000 mark, suggesting China maintains its support of the Yuan and will not allow the currency to depreciate in a disorderly manner.Today's early focus will fall on the German CPI report for December. It is a very unusual German CPI release schedule this week, with the state of Hesse having announced their update this morning, followed by the national reading later today. That is followed by the Bavaria reading tomorrow and then the rest of the states on Thursday. After the Hesse numbers and the upside misses from the Portuguese and Spanish CPI reports, the markets are braced for another faster than expected number out of Germany.US data today is limited to the services PMI and factory orders, while we should also hear from the Fed's Cook on the economic outlook.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

Green bonds lead a year of record ESG supplyIt was also another very busy year for ESG supply where banks raised a record EUR51.55bn via non-covered single currency paper, continuing the general upward trend which has held since sales began in 2015.Overall, ethical debt sales accounted for 23.6% of all supply in the asset class, just topping to the 23.3% share achieved in 2021.As the race to decarbonise portfolios continued, it was once again the ever dominant green segment which led ethical supply from banks, accounting for 85.4% of all ESG paper.The increased dominance of green bonds came in contrast with falling supply via both social and sustainable paper, while there was no issuance of SLB paper at all.

Making good on his threats to impose tariffs on Mexico, Canada and China, President Trump sent the stock market into a tailspin this morning, while Treasury yields fell as investors rotated out of riskier assets into safer havens like Treasuries and gold. Fears that a full-blown trade war would disrupt global supply chains, reignite inflation and slow the economy sent the three major averages tumbling at the open. That rotation away from risk-on assets kept at least nine potential high-grade borrowers on the sidelines to kick off the week, a week that is expected to see $32bln price, the new month that, on average, is expected to see $170bln in new ex-SSA supply.That resulted in the third “zero” ex-SSA issuance day of the year. There was one deal priced today, though it was an SSA. Romania raised $1.25bln via a 12yr note offering, with EIB ($3ln (WNG) 10yr) and BNG Bank (3yr notes) on tap for tomorrow.However, shortly thereafter, it was reported that the (25%) tariffs on Mexico would be put on hold for 30 days after Mexico’s President Claudia Sheinbuam agreed to immediately supply 10k Mexican soldiers on the border separating Mexico and the US. The stay of the tariffs on Mexico was further proof that Trump is using the imposition of tariffs as a negotiating tool. He is apparently in the process of working out a deal with Canada, after a series of phone calls, which could lead to a postponing their proposed tariffs as well as negotiations continue.With that in mind, cooler heads prevailed, and the three major averages staged a massive comeback, with the Dow closing off 123 points after trading more than 650 points lower from the get-go. The same can be said for the S&P500, which opened the day 1.5% lower, ultimately closing 0.45% lower, while the Nasdaq lagged closing 1.20% lower, though it was also down as much as 2.5% at the peak of the selloff. The move back into risk sent Treasury yields higher after hitting seven-week lows, though yields on the long end of the curve were still lower on the day. The benchmark 10yr note closed at 4.54%, better by 4bp on the day, though it did trade as low as 4.48% intraday, while the long bond yield was also 4bp lower on the day, closing at 4.77%, again, off its lows of the Day (4.73%).It was a different story on the short end where the 2yr note saw its yield move 4bp in the opposite direction, closing at 4.26%. It should be noted that the Treasury Department announced it plans to raise $815bln in the first quarter, substantially more ($620bln) it raised in the fourth quarter of 2024.While the high-grade primary market was devoid of any issuance, there was no such hesitation on the part of high-yield borrowers, as five firms tapped the market for a much needed $3.474bln. After high yield issuance in 2024 outpaced 2023 by 62.7% ($287.635bln vs $176.78bln), year-to-date, this year’s issuance is running 31.7% ($24.369bln vs $35.67bln) behind last year.The high number of stand downs today, could make for a very crowded calendar tomorrow in the high-grade market as the dust settles and prospective borrowers jockey for position before several key labor-centric economic releases. Tomorrow will present the market with the latest JOLTS report (8000k followed by the ADP private payrolls report (150k) on Wednesday. That will be followed on Thursday with the weekly initial jobless claims (213k), and continuing claims (1870k), culminating with the January jobs report (170k) of Friday, not to mention a slew of manufacturing data.If you recall, after the latest FOMC policy meeting, Fed Chair Powell said the labor market remains in solid condition and the committee is squarely focused on “maximum employment” making this week’s data all that more important. As DoubleLine’s Jeffrey Gundlach described it, “It appears we’re at the height of data dependency.”.Baa3/BBB-/BBB-Romanian Government International Bond (ROMANI)$1.25bln [Romanian Government International bond] (ROMANI) 144a Reg S CAT 1 12yr (2/10/37) senior unsecured notes. Baa3/BBB-/BBB- (s/n/n). BofA/ERSTE/GS(B&D)/ING/MS/RBI. UOP: For budget deficit financing and redemption of public debt. Denoms 2k x 1k. Marketing: NetRoadshow: https://www.netroadshow.com/nrs/home/#!/show=e621af59 (Recommended) OR https://www.netroadshow.com | deal entry code: ROMANIA25 (not case-sensitive). S/D 2/10 (SSA)IPT(s)GUIDANCELAUNCHEDPRICED+325 area+305 (+/-5)$1.25bln 2/10/37 +300$1.25bln 7.505 2/10/37 99.633 7.547% +300 (TSY 4.25% 11/15/34)BOOKS:$4.8blnNIC(s):N/ACOMP(s):N/A.VOLIPT/PXXCVRDNICTRADING(TODAY) 02/03000.000.000.00WK ENDING 02/07/25000.000.000.00WK ENDING 01/31/2531,950-283.391.77-1.06WK ENDING 01/24/2524,250-253.19-1.36-1.05WK ENDING 01/17/2558,450-253.382.06-1.84WK ENDING 01/10/2562,800-253.152.59-0.25WK ENDING 01/03/2516,050-242.622.060.10WK ENDING 12/27/24000.000.000.00WK ENDING 12/20/24000.000.000.00WK ENDING 12/13/2418,000-253.410.68-2.43WK ENDING 12/06/2423,800-284.562.48-2.26WK ENDING 11/29/2413,700-242.882.450.00WK ENDING 11/22/2436,750-273.772.81-1.28WK ENDING 11/15/2446,350-273.361.210.17WK ENDING 11/08/241,900-222.82-1.330.00WK ENDING 11/01/2427,450-242.802.690.11WK ENDING 10/18/2412,100-293.062.67-1.62WK ENDING 10/18/2426,300-262.390.00-2.06WK ENDING 10/11/2416,050-262.402.13-4.11WK ENDING 10/04/2415,450-294.510.05-5.86YTD "ZERO DAYS"32024 / 23YTD FRNS DROPPED32024 / 2125-Feb00.000.000.000.0025-Jan193,500-25.343.202.05-0.8324-Dec41,800-27.004.101.83-2.3024-Nov98,700-26.513.471.92-0.4424-Oct95,000-26.063.111.75-2.3224-Sep172,550-28.403.702.65-1.4024-Aug106,995-29.354.504.13-2.8524-Jul125,504-26.264.802.47-2.9624-Jun102,675-24.603.284.080.7024-May136,150-29.893.511.93-0.8424-Apr106,680-23.934.071.65-1.1024-Mar142,909-25.003.821.460.5924-Feb199,425-26.513.931.89-1.18VOLIPT/PXXCVRDNICTRADING2025 YTD193,500-25.483.202.05-0.992024 YTD215,415-26.503.931.89-1.2025 VS '24 (% DIF)-10.10%1.02-0.730.160.21FEBFEB VOLLOW ESTAVE ESTHI ESTDIF (+/-)20250150,000170,000195,000-170,00020252025 YTDLOW ESTAVE ESTHI ESTDIF (+/-)YTD193,5001,350,0001,650,0001,900,000-1,456,500---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

Markets are approaching today's ECB meeting in an ebullient mood where EU and US index futures currently point to further gains for stocks to follow yesterday's tech led move which propelled S&P500 (+1.18%) and Nasdaq (+1.96%) to record highs.Notably, with markets latching on to the weaker ADP employment data and seemingly discounting the strong ISM services print, the downward move in yields remained intact with the German 10yr yield closing lower for a third day while the US equivalent fell for a fifth straight day, making for a cumulative 33.6bps fall.Unsurprisingly, bullish sentiment spilled over into Asia today with chipmaker TSMC rising by up to 7.4% to a record high in the wake of Wednesday's surge in Nvidia to a fresh all-time peak.For today, the ECB takes centre stage where a 25bps reduction in the deposit rate to 3.75% is a foregone conclusion although strong guidance on future cuts looks unlikely given recent unfavourable inflation developments and the mixed rhetoric from ECB officials seen before the quiet period. New economic projections will be key. Ahead of the event, markets are pricing in just over 70bps of cumulative easing from the ECB by year-end.Given the intense focus on the ECB, today's European data releases may struggle to exert an impact whilst it's a relatively slow day for US data ahead of Friday's key employment report where weekly jobless are seen holding broadly steady.Auction supply picks up where Spain and France offer up to EUR18.75bn in mostly conventional paper which will provide a timely test of demand at lower yield levels following the multi-day rally seen in the EGB rates complex.For more on latest developments see the European Breakfast Briefing.Thursday's supply prospectsIG issuers are expected to stay away from the primary bond market given the distraction of the ECB verdict. However, HY borrower International Personal Finance is set to print a EUR341m 5.5NC2 line after a recent roadshow and add to the EUR31.07bn of euro paper that crossed the tape in the first three days of the week.** International Personal Finance EUR341m 5.5NC2 at 11% area IPTsFor the seventeenth week this year, syndicate desks around the Street underestimated the resolve of US high-grade corporate borrowers to push their financings across the finish line. In a week that was only supposed to produce on average USD25bn in new ex-SSA debt, a total of 29 borrowers raised USD26.175bn over a three-day span. For more colour see THE ENDGAME.What to watch today** Key Data: SP Apr Industrial Production (08:00), GE May HCOB Construction PMI (08:30), IT Apr Retail Sales (09:00), UK May S&P Global Construction PMI (09:30), EC Apr Retail Sales (10:00), US Q1 Nonfarm Productivity (13:30), US Q1 F Unit Labor Costs (13:30), US Apr Trade Balance (13:30) and US Weekly Continuing/Initial Jobless Claims (13:30)** Key Events: ECB Rate Decision (13:15) and President Lagarde Holds Presser (13:45). BoE Decision Maker Panel survey (09:30)** Auctions: SP to sell EUR5-6bn 2027, 2031 & 2054 Bonds, as well as EUR250-750m 2039 Linkers (09:30). FR to sell EUR10.5-12bn of 2034, 2038 & 2055 OATs (09:50)

EUR/USDUSD/JPYGBP/USDAUD/USDUSD/CADDOWDXYOPEN1.0933156.381.29900.67371.3677+243.60103.80HIGHClosedLOW@CLOSE1.0932156.571.30050.67271.368541, 198.08103.81The Dollar remained under pressure overnight, after yesterday's fall in yields and the Trump currency comments, with Usd/Jpy at one stage slipping down to 155.38, its lowest level since Jun 7th. US 10 year yields have recovered from yesterday's dip below 4.15%, which has helped lift Usd/Jpy back above 156.00. Reuters reported that the latest BoJ data does not immediately show any evidence of intervention yesterday.Aussie Dollar longs will be concerned that despite the release overnight of the impressive Australian jobs report for June, the currency is still the worst performing G10 unit so far this week.50.2k jobs were created in June, with further good news coming from the fact that 43.3k of them were full time roles. The unemployment rate did tick up to 4.1% as expected, but that is only 0.6% above the record lows in 2022.The head of labor statistics at the Australian Bureau of Statistics pointed to the fact that the employment-to-population ratio and participation rate both rose by 0.1 percentage point to 64.2% and 66.9% respectively, which are both near their 2023 highs, as well as the continued high level of job vacancies as signs that the labor market remains relatively tight.The other major data update overnight came from the UK, where average earnings matched expectations by coming in at 5.7%.Today's main event is the ECB monetary policy decision, where an unchanged verdict is universally expected. The big question is whether the Bank's president Lagarde will hint at a reduction in September.US numbers include the Philly Fed survey and jobless claims.Fed speakers include, Goolsbee, Logan and after hours Daly.Noted Fed watcher Grep Ip at the WSJ argued that the Fed should cut rates later this month and not wait until September. He declared that if the Fed was truly data-dependent and trusted their own forecasts they would be comfortable cutting rates now, as accelerating inflation looks like a lesser risk than a weakening labor market.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free demo of the service today.

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8 ex-SSA (including 2 yankees) issuers announced deals (see table below)Stocks: DOW (-101), S&P500 (-0.17%) and NASDAQ (-0.11%)Treasury yields are mostly higher with the benchmark 10yr yielding 4.203% (+1bp), the long bond yielding 4.375% (+2bp), and the 2yr yielding 4.175% (unch)Corporate spreads tightened 2bp with the average high grade bond trading 81bp over comparable TreasuriesTraders in the Fed Funds future market are putting the odds of a 25bp rate cut in December at 70.3% up from 59.4% last week and no cut at 29.7% down from 40.6% last weekIn M&A news, BlackRock to buy HPS for approximately $12bln in an all stock transaction & Coterra Energy to use proceeds from todays 2-pt deal to fund the Franklin Mountain Energy & Avant Natural Resources acquisitions2024 HIGH GRADE ISSUANCE - 12/02 WEEK, DECEMBER & 2024 ESTIMATES.12/02 WKLO ESTAVE ESTHI ESTACTUALDECLO ESTAVE ESTHI ESTACTUAL2024LO ESTAVE ESTHI ESTACTUALEX-SSA$25.0B$27.0B$30.0B$8,050EX-SSA$25.0B$40.0B$50.0B$8,050EX-SSA$1.100B$1.275B$1.350B$1,490,258OVERALL$30.0B$32.5B$35.0B$8,050OVERALL$30.0B$42.5B$55.0B$8,050OVERALL$1.350B$1.420B$1.550B$1,861,773.2024 HIGH GRADE ISSUANCE - 12/3 CALENDAR.AMTISSUERMATRATINGSMGRTALKTBA (FAB)SAMMON29NR/BBB+CITI+125 ATBA (M&A)CTRA29BAA2/BBBJPM+150 ATBA (M&A)CTRA34BAA2/BBBJPM+180 ATBA (SUB)CVS55BAA3/BB+BARC7.375-7.50TBA (SUB)CVS54BAA3/BB+BARC7.25-7.375TBA (FAB)RGA31A1/AA+JPM+115 A300 (WNG/FMB)ETR34BAA2/BBB+MS+145 ATBAAEP35BAA1/BBB+/A-BMO+125-130AMTISSUERMATRATINGSMGRTBACNQCN29BAA1/BBB-BOATBACNQCN34BAA1/BBB-BOATBA (FRN)AVOL28BAA3/BBB-JPMTBAAVOL28BAA3/BBB-JPMTBAAVOL30BAA3/BBB-JPM.2024 HIGH GRADE ISSUANCE - RECENT MANDATES.ANNOUNCEDISSUERRATINGSMGRSCALLDEAL2-DecGRUMA SABNR/BBBBBVA/BOA/JPM/SCOT2-Dec2-PT 144A REG S DEAL2-DecATLAS WAREHOUSEBAA3/BBB-BNP/BARC/JPM/MS2-DecSR UNSECURED DEAL3-DecFNB CORPBOA/MS3-DecSEC REGISTERED DEAL3-DecTAPESTRY INCBAA2/BBBBOA/MS/JPM3-Dec2-PT SEC REGISTERED DEAL.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

Three issuers are set to price single currency non-covered deals on Monday, firing the opening salvo in a week which is expected to deliver EUR8bn in new paper, according to the average estimate collected in our Friday survey.That would mark a significant slowdown compared to last week’s EUR18bn total which easily outstripped the EUR14.5bn average estimate.Last week’s total was given a last minute boost by a couple of Friday deals including a red-hot EUR2bn 11NC10 senior trade from JPMorgan where orders peaked at EUR11bn before slipping to “only” EUR7.5bn after 38bps was slashed from IPTs to leave the reoffer around 5bps through the estimated fv level. Put another way, the reoffer spread was just 3bps above where its existing NC 3/33 line was spotted. In secondary, despite the keen pricing level, JPM’s deal is bid around 2bps inside reoffer on Monday morning.In all, last week’s EUR18bn of new paper attracted plenty of demand where the average cover ratio was comfortably over 3x, indicating that investors still have plenty of cash, and appetite, to support fresh supply as we move closer toward the European bank earnings season and associated blackouts.Elsewhere, the pipeline has seen several new additions too.Snapshot of Monday’s live dealsDateIssuerESG Deal TypeCCYAmount (mn)MaturityInitial Price TalkLatest Px TalkFinal PricingBook Size (mn)20-JanJyske Bank A/SGreenEURTBD6.25NC5.25m/s+160a--Awaiting Update20-JanNationwide Building SocietyEURTBD4NC33mE+100a--4,000 comb.20-JanNationwide Building SocietyEURTBD11NC10m/s+160a--4,000 comb.20-JanNorddeutsche Landesbank (NORDLB) GirozentraleEUR50004/02/2028m/s+125a--1,300Nationwide Building Society go with 2-part EUR 4NC3 FRN & 11NC10 FIX SNP** Nationwide Building Society (“NWIDE”), rated A1 (Stable) / A+ (Stable) / A+ (Stable) (Moody’s / S&P / Fitch), has mandated Barclays, BofA Securities, Citi, HSBC, Wells Fargo Securities as Joint Lead Managers for a EUR Benchmark two-part Reg S (Cat 2), Bearer, NGN, TEFRA D Senior Non-Preferred, direct and unsecured with EUR bmk 4NC3 FRN (Maturity Date Interest payment date falling on or nearest to 27 January 2029) and EUR bmk 11NC10 (Maturity Date Interest payment date falling on or nearest to 27 January 2036) Fixed-to-FRN tranches, exp ratings A3 / BBB+ / A (Moody’s / S&P / Fitch). Pay date 27 January.IPTsEUR bmk 4NC3 FRN @ 3mEUR+100 areaEUR bmk 11NC10 Fxd-to-FRN @ MS+160 areaMonday's new 11nc10 line marks the UK lender’s first euro sale since bringing a EUR1bn 8nc7 SNP in July (3.834% 7/32-31) at i+ 115 into a EUR2.5bn book.That line is also Nationwide’s longest outstanding SNP and was spotted by leads in the comps list (below) at z+ 112.Using that as a basis, and then looking at the curve of UK peer HSBC, an adjustment for the additional duration would suggest fair value in the context of m/s + high 120s.RatingSizeCallMaturityDMGS 0 01/29-28A2/BBB+/A€1.00bn01/2801/29+70/RABOBK 0 07/28-27A3/A-/A+€1.50bn07/2707/28+60/RY 0 07/28-27A1/A/AA-€1.00bn07/2707/28+59/RatingSizeCallMaturityz-SpreadNWIDE 3.828 07/32-31A3/BBB+/A€1.00bn07/3107/32z+112/HSBC 4.787 03/32-31A3/A-/A+€1.25bn03/3103/32z+110/HSBC 4.856 05/33-32A3/A-/A+€1.75bn05/3205/33z+114/HSBC 3.834 09/35-34A3/A-/A+€1.50bn09/3409/35z+126/Jyske Bank refresh SNP curve with 6.25NC5.25 green** Jyske Bank A/S (Ticker: JYBC), rated A+ (S&P), has mandated Danske Bank, Goldman Sachs International, ING, J.P. Morgan & Jyske Bank as Joint Bookrunners for a EUR Green Non-Preferred Senior Reg S Eurobond, Registered Form Notes due 29 April 2031, exp rating BBB+ (S&P). Pay date 29 January. Optional Redemption Date/Reset Date: 29 April 2030.IPT: MS + 160bps areaJyske Bank last priced SNP paper in May via a EUR500m 6.25NC5.25 vanilla (4.125% 9/30-29) line courtesy of a relatively measured EUR1.075bn bookThat was preceded by a EUR500m 6nc5 green sale in Nov 2023 (4.875% 11/29-28) although the ethical tag did little to overtly stimulate demand with the final book pegged at EUR950m.Based on levels provided (below), fair value on the new 6.25nc5.25 line appears to be in the context of m/s +130 to low 130s.TickerCouponMaturityCallI-SpreadGreenJYBC4.875%Nov-29Nov-28110GreenJYBC4.125%Sep-30Sep-29123NYKRE3.625%Jul-30-113DANBNK4.750%Jun-30Jun-2991GreenNordLB creating SNP curve with new 3yr** Norddeutsche Landesbank - Girozentrale, rated Aa2 (stable) / A+ (stable) (Moody’s / Fitch) has mandated Barclays, BNP Paribas, Deutsche Bank, NORD/LB and UniCredit on a EUR500m wng 04 February 2028 issue, expected ratings A1 / A+ (Moody’s / Fitch). Pay date 29 Jan. ISIN / WKN DE000NLB5AB4 / NLB5AB.IPT MS+125bps areaThe sale follows a 5yr debut SNP launched in Sep (3.625% 9/29) which raised EUR500m at m/s +120 although proved something of a slow burner where final demand settled at EUR850m.Comps provided show that line is trading at a relatively wide-looking level of i+113 which is 9bps wide of a recent 5yr line from LBBW which matures some six-months later.Looking at the comps provided, fair value appears somewhat open to debate although sources closed to the trade were seeing the theoretical level in the context of m/s + mid 90s.BondTenorSpreadRating (M/F/S&P)CommentBYLAN 4 ¼ 06/21/272.43y65bpA1/A+/-greenBYLAN 4 ⅜ 09/21/283.68y69bpA1/A+/-greenUCGIM 3 ⅞ 06/11/283.4y85bpBaa3/BBB/BBB-callNDB 3 ⅝ 09/11/294.65y113bpA1/A+/-bulletLBBW 3 ½ 03/21/305.17y104bpA2/A+/- (exp.)bullet / came 2025Fresh in the pipeline** Achmea B.V. (“ACHMEA”) rated A (stable) /BBB+ (stable) by (Fitch/S&P), has mandated HSBC as Global Coordinator and ABN AMRO, Barclays, BBVA, BNP Paribas, Deutsche Bank & HSBC as Joint Bookrunners to arrange a series of fixed income investor calls on 20-Jan. A EUR 300 million (WNG) perpetual Restricted Tier 1 offering, resettable in July 2035, will follow subject to market conditions. The transaction is expected to be rated BBB by Fitch and BB+ by S&P. Comps here** MBH Bank Nyrt., one of the leading banks in Hungary and the CEE region, rated Baa3 (stable) by Moody’s, has mandated Citi, Erste Group, ING, MBH Investment Bank and UniCredit as Joint Lead Managers to organize a series of fixed income investor calls commencing 20-Jan. A pre-recorded Global Investor Call will also be made available. A EUR denominated Benchmark RegS Senior Preferred Bond (MREL eligible) with a 5NC4 tenor may follow, subject to market conditions. The notes are expected to be rated Ba2 by Moody’s and will be issued under the Issuer's EUR 1.5bn EMTN programme. Comps here** Istituto per il Credito Sportivo e Culturale, an Italian public development bank owned 80.4% by MEF and rated BBB- (Stable) / BBB (Positive) by S&P and DBRS, has mandated IMI-Intesa Sanpaolo as Sole Sustainability Coordinator and IMI-Intesa Sanpaolo, Morgan Stanley, Santander and UniCredit as Joint Bookrunners to arrange fixed-income investor calls 20-21 Jan. A potential Euro 300m, 5 years, RegS Bearer, Senior Unsecured Social Bond transaction is expected to follow in the near future, subject to market conditions. An amount equivalent to the net proceeds of the bonds will be allocated to finance and/or re-finance, in whole or in part, Eligible Social Assets, as defined within the Issuer's Social Bond Framework dated July 2022.Performance tracker of recent EUR benchmark dealsIssuerDealRe-offer spread (m/s)Current i-spread (bid)JPM (Snr)3.588% 11NC10+112+110CABKSM (AT1)6.25% PNC8+393.5+378GS (Snr)3.50% 8NC7+115+107NYKRE (SNP)3.625% 7/30+125+116NYKRE (T2)4.0% 10.25NC5.25+165+160LFBANK (SP)3.25% 1/30+95+92NOVBNC (SP)3.375% 6NC5+105+107.5BAWAG (SP)3.5% 1/32+103+103BAMIIM (SP)3.375% 1/30+95+95KBCBB (HoldCo)3.50% 7NC6+100+103LBBW (SNP)3.50% 3/30+105+105.5NOVALJ (SP)3.50% 4NC3+115+118SBAB (SP)3.25% 2/30+75+72.5TD (T2)4.03% 11NC6+150+151ABNANV (SP)3.125% 1/30+73+69BPCEGP (SNP)4.0% 9NC8+147+143RY (Snr)3.25% 6NC5+90+91BYLAN (SP)3.0% 2/30+70+64---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

The DXY fell to a 9-day low late yesterday of 102.558 but has found support at the 102.600 handle.After hours yesterday the Fed's Bostic affirmed that a rate cut is coming but wants to see 'a little more data' and suggests there could be a cut by the year end of the economy evolves as expected.Bostic added that he wants to be “absolutely” sure to cut rates, noting that it will be very bad if they started easing but then have to pivot and hike rates again.In markets, S&P added 1.7% to a 12-day high while the futures are little moved ahead of the EZ open.Sep24 Bund futures traded in a 15-tick range o/night with a high at 135.04 (-2 ticks) vs an 8 day high at 135.08 on Tues & Sep24 US 10yr notes hit 113-22 (+2 ticks), matching yest's 8-day best.Fresh in the CEEMEA PipelineNo new deals in the pipeline.On the RadarAwaiting updates from The Republic of Slovenia, rated A3 (Stable) by Moody’s, AA- (Stable) by S&P, A (Stable) by Fitch and AA- (Stable) by JCR, who has filed Securities Registration Statement with the Japanese authorities for its potential JPY-denominated senior notes in Samurai format.The JPY Notes may be issued in the near future subject to market conditionsThe JPY Notes, if issued, are expected to be rated AA- by S&P and AA- by JCRTenors: 3yr / 5yr / 7yr / 10yrOne or more tranches may be dropped subject to issuer's preference and demand & each tenor may include Social Bond and/or Non-labelled bond tranches.Bookrunners include BNP Paribas, Nomura and SMBC Nikko.Priced DealsNo new priced deals.What to watch on WednesdayThe main events in CEEMEA today are Poland’s final CPI and 2Q GDP (8GMT), S. Africa's Business Confidence (9:30GMT) and Retail sales (11GMT) and Russia's weekly CPI (16GMT).In the US, CPI data is due (12:30GMT).No central bankers are scheduled to speak today.Wider market SentimentUSD Index at 103.118UST 2yr/10yr at 3.935%/3.847%Bund 2yr/10yr at 2.330%/2.180%Brent at $81.22/brl---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

With the EU expected to have completed its first syndication of 2025 by Wednesday - it provides a week-long window in its issuance ‘calendar’ but almost always uses the Tuesday - we had anticipated that another of the major sovereign issuers may have stepped up for a mid-week syndicated outing (Spain, Austria, Ireland, France and Germany all still to surface). However, as the EU reached its pricing stage late on Tuesday afternoon that looked increasingly unlikely and so it transpired that only two names mandated banks for new deals for today’s business and there are no sovereigns (or large supranationals for that matter) in sight in either euros, dollars or sterling.Danish municipality financier KommuneKredit has hit screens with a new 8yr conventional line whilst Land Baden Wuerttemberg brought a new 15yr LSA. KommuneKredit is a fairly frequent issuer in the EUR space with 2-3 outings annually in more recent years with deal sizes ranging from EUR500m-1bn. Today’s deal therefore lands in the middle of that range at EUR750m. There are two standout statistics, firstly the order book which settled at over EUR3bn and therefore equalled the second highest ever for the issuer in the currency. Secondly, the 3bp spread compression from IPT to re-offer which saw the deal land at m/s+41. There have been very few 7 to 8 year deals priced so far in 2025 to compare that level against (Rentenbank - but probably not the best comp) although an interpolation across the KOMMUN curve suggested a fair value close to m/s+40a.Achieving the same 3bp of spread compression Land Baden Wuerttemberg went even better on the demand front with an order tally that touched EUR4.9bn. The issuer's 15yr transaction is the first LSA of that tenor since State of Hessen priced a EUR1bn 15yr last February. Interestingly, Baden Wuerttemberg has opened its 2025 account with a fixed coupon transaction having heavily relied upon FRN's in 2024. Indeed, six of its eleven (yes, eleven) outings were for floating rate paper accounting for EUR3.2bn of the EUR6.85bn total. For context, the issuers total issuance across the prior three years was EUR1.8bn (3 deals), EUR350m (1 deal) and EUR1.1bn (2 deals).Live dealsIssuerESG Deal TypeCCYAmount (mn)MaturityInitial Price TalkFinal PricingBook Size (mn)KommuneKreditEUR7503/17/2033m/s+44am/s+413,000Land Baden-WuerttembergEUR1,0001/23/2040m/s+60am/s+574,900New Mandates** Central American Bank for Economic Integration (CABEI), rated AA/Aa3/AA (S&P, St. / Moody’s, St.) has mandated Barclays, BofA Securities, BNP Paribas and CACIB as lead managers for its new USD-denominated 3yr 144A/Reg S bond due January 2028. The new issue will be a Sustainability Benchmark Bond. The Bond is expected to be rated AA by S&P and Aa3 by Moody’s . An amount equal to the net proceeds of the Notes will be allocated by CABEI to finance and/or refinance new and/or existing Eligible Green, Blue, and Social Projects as further described in CABEI’s 2024 Sustainable Bond Framework. An Investor Presentation is available here.** EFSF, the European Financial Stability Facility, rated Aaa (Moody’s) / AA- (Fitch) / AA- (S&P), has sent a Request for Proposal to a selection of banks from the EFSF/ESM Market Group with regards to an upcoming transaction, subject to market conditions. Expect next week's business - Monday/Tuesday** Region Wallonne, rated A3 (Moody's, negative) has mandated ABN AMRO, Credit Agricole CIB, Deutsche Bank, HSBC, and LBBW as Joint Lead Managers for its upcoming EUR dual tranche transaction comprising a new long 10yr benchmark due 22 June 2035 and an increase of the Social 3.90% benchmark due 22 June 2054 (BE0390135011). The transaction will be launched in the near future, subject to market conditions. The proceeds of the social bond notes (tap of the 3.900% benchmark due 22 June 2054) will be used to finance social expenditures and other recurrent social investments within Région Wallonne's Green, Social & Sustainability Bond Framework.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

EU stock bulls look set to bank a few gains this morning to follow a four-day win streak for Stoxx600 with yesterday’s 1.09% gain taking the index to yet another record high.Over in Asia, further strength in tech has lifted Hang Seng over 2.7% higher today while US index futures are in the green which comes after yesterday’s threat of reciprocal tariffs failed to prevent gains for S&P500 (+1.04%) and Nasdaq (+1.50%). Those gains were set against a backdrop of subsiding yields as US debt markets took comfort from some softer components of the PPI report and the completion of the latest supply cycle.So what could spoil the party today? Well, it could be data where key US updates comprise retail sales and industrial production for Jan where the former is set for MoM decline at the headline level. Ahead of that, we get Eurozone 4Q Preliminary GDP.Elsewhere, it’s a slower day for earnings and speakers while rates markets get a break from supply which could help to underpin the relief rally in the rates complex seen on Thursday.Otherwise to note, Monday is a holiday in the US (President’s Day).As we go to print, headline writers are likely watching gold closely where the spot price is pushing up toward Tuesday’s record high, making 3k gold a potential reality this side of the weekend.For more on latest developments see the European Breakfast Briefing.Friday’s expected supplyAt the time of writing there were no confirmed deals for Friday's business but given the strong response for this week's deals so far, we shouldn't rule out some opportunistic activity. Even if nothing should pop up then we have already beaten the highest combined euro IG issuance estimate of EUR61bn given by participants in our weekly poll, with the current total at EUR61.85bn. That is, of course, flattered by some big trades from France, Italy and the EU, with SSAs having accounted for EUR38.15bn of this week’s overall haul.The relief rally in the Treasury market was enough to entice three high-grade corporate borrowers to dip into the US public debt market Thursday. However, the day’s total did little to lift the spirits in the high-grade primary market this week, where we have seen 10 borrowers raise only USD17.35bn, not nearly enough to reach even the lowest weekly estimate of USD25bn, let alone the average weekly estimate of USD35bn. This marks the first week this year that issuance has failed to surpass the average weekly estimate. For more colour see THE ENDGAME.What to watch today** Key Data: SP Jan F CPI (08:00), EC Q4 P GDP (10:00), US Jan Retail Sales (13:30), US Jan Import Price Index (13:30), US Jan Industrial Production (14:15), US Jan Capacity Utilization (14:15) and US Dec Business Inventories (15:00)** Key Events: Fed’s Logan speaks (20:00)** Auctions: No major term auctions scheduled for Friday 14th Feb** Earnings: 12 Stoxx600 and 2 S&P500 companies reportAll times GMT---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

- Cuts Bank Rate 25bp to 5%, starting easing cycle. Vote 5-4 (Greene, Haskel, Mann and Pill) in finely balance decision- Do not expect a rapid rate cutting campaign. Policy remains restrictive and will do for sufficiently long (to squeeze persistent inflation pressure)- Plenty of caution given continuing concerns surrounding inflation persistence (won't cut too quickly or by too much)- Domestic inflationary pressures remain elevated. Better economic growth an upside inflation risk.- Energy inflation weight to ease over H2, Headline CPI expected to rise to 2.75% in H2- Services CPI ex-indexed/volatile/rents/foreign holidays could be turning. Indexed & regulated services have been an upside risk. History suggests this will dissipate relatively quickly. Below graphic from MPR- Inflation perceptions and expectations moving in the right direction which points to normalising wage dynamics (i.e. lower pay growth)- Placing inflation context into three part to framework:- Are we seeing a self-correcting path of inflation persistence (benign)?- Do we need this plus output gap? Have the shocks induced structural changes?- Structural changes (e.g. higher equilibrium unemployment rate) risk more persistent inflationary pressures- Mean path for interest rates which takes into account upside risks closer to 2% than modal. Latter 1.7% in Q2 2026 and 1.5% in Q2 2027- Upside inflation skew now due to domestic risk, whereas previous upside skew down to Middle-East events- Minimum wage hike having small impact on pay growth- Data evolving in line with expectations- Looking to move to demand-led level of reserves (next QT decision to made at September MPC). Confident QT can continue to operate in the background for next year---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

EUR/USDUSD/JPYGBP/USDAUD/USDUSD/CADDOWDXYOPEN1.1164143.231.33900.68851.3476+260.36100.48HIGHClosedLOW@CLOSE1.1182144.681.33270.68991.346642, 175.11100.86The DOLLAR has come under significant pressure again overnight, with traders seemingly positioning themselves for the possibility of a downside miss in the US Core PCE Price Index for August. Overnight though the main focus has been on Usd/Jpy, which has again traded in an extremely volatile manner.The main focus was on the battle for the leadership of Japan's ruling party, the LDP, who will become the next PM, replacing the outgoing Kishida. Usd/Jpy surged to 146.49, when the dovish Takaichi was seen as having the support of a number of key LDP officials including Aso, but in the end the hawkish Ishiba won the vote by 215 to 194 in the run-off. Many lawmakers believed Takachi did not command the broad appeal of the electorate, as the party likely needs to be planning for a fresh general election. There was also much discussion about the make-up of Ishiba's cabinet and whether there will be room in it for Takaichi.The Ishiba victory sent Usd/Jpy spiraling lower, down to 142.80 within moments, before it settled down in the low 143.00s, as a pre year-end BoJ rate hike is now seemingly back on the cards.October ECB rate cut expectations received another boost from sizeable downside misses in both French and Spanish flash CPI readings for September. French CPI on a headline basis fell to just 1.2% y/y, way below the 1.6% y/y forecast and the 1.8% y/y print in August. It was also notable that services inflation eased as well, to just 2.5% y/y. The headline rate is now at its lowest reading since April 2021. Meanwhile Spanish core inflation slowed to 2.4% y/y in September, way below the 2.8% y/y consensus.If the German numbers on Monday and the Eurozone flash figure on Tuesday follow the same pattern as the French and Spanish data, expectations for an increase in the pace of ECB easing, with a cut in October will intensify further.Goldman Sachs stated that they are now expecting a rate cut in October, compared to December previously.Eur/Usd slipped to 1.1125 in response, but the Dollar selling saw the pair rebound hastily to the 1.1160/70 area.Also overnight, Bbg reported that China cut the amount of cash banks must keep in reserve today and lowered the seven-day reverse repurchase rate to 1.5% from 1.7% key policy rate, as Beijing continues this week's strong policy action in a push to support the stalling economy and investor confidence, as doubts remain the about 5% growth target for 2024 can be achieved.As well as the US PCE report today, we also receive updates on personal income/spending, advanced trade, wholesale and retail inventories and the UMich sentiment report.The focus north of the border is on the Canadian GDP print for July and the August flash.We should hear from the Fed's Collins, Kugler and Bowman, the ECB's Nagel and the Riskbank's Thedeen.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

EUR/USDUSD/JPYGBP/USDEUR/JPYEUR/GBPAUD/USDUSD/CADOPEN1.0840149.001.2959161.510.83640.62841.4310HIGH1.0849149.891.2973161.910.83720.62901.4389LOW1.0784148.701.2903161.050.83500.62191.4312CLOSE1.0802149.521.2910161.510.83650.62321.4390After some early weakness, the Dollar drew an increasing amount of demand, with the DXY rebounding from 103.752 up to 104.376. It seems that the expected month and quarter-end buying of the US unit overshadowed other more negative influences.US data was mixed again, with the Chicago PMI rising to 47.6 in March from the 45.5 level in February, with the reading coming in above the 45.0 consensus forecast. But the Dallas Fed Manufacturing Activity report also for March tumbled to minus 16.3, below the minus 5.0 expected.Focus remains very much on the April 2nd tariff deadline, with Nick Timiraos, noted Fed watcher from the WSJ, writing that Trump officials still are not sure what they’re doing with tariffs this week. He adds that in recent days, advisers have considered imposing global tariffs of up to 20% that would hit virtually all U.S. trading partners. Timiraos declards that "whatever the final plan, the president wants the policy to be “big and simple.” That likely means the final action will be broader than earlier plans to prioritize levying tariffs on the U.S.’s biggest trading partners, about 15% of the world’s nations."The Euro garnered some fleeting support from the German state and Italian CPI updates for March, as their firm readings contradicted the soft updates from France and Spain on Friday, but Eur/Usd's gains to 1.0849 were quickly unwound.The ECB President Lagarde declared that Trump's trade measures will hurt global growth and that keeping inflation in check is a constant battle. Lagarde added that the Trump tariffs are a chance for Europe to display its independence. Meanwhile, the ECB's Panetta stated that monetary policy needs to consider the weak economy and that growing uncertainty requires prudence on rate cuts. Panetta also insisted that the fight against inflation is not over.In other news, French far-right leader Marie Le Pen was barred from running for public office for five years, by a criminal court in Paris, ruling out a 2027 Presidential run. Le Pen and her National Rally party were found guilty of diverting millions of Euros in EU funds to finance activities related to their domestic agenda.

Wednesday looks set to be the second consecutive day of the week to see two sovereigns approaching the euro capital markets. The Kingdom of Denmark was out early with IPTs for its latest 2yr line having conducted investor calls on Monday but decided to sit out yesterday, whilst China could dominate proceedings (and the headlines) with its dual tranche 3yr/7yr transaction that has already attracted significant attention during Asian hours (EUR8.6bn of combined orders hours before the European open).Alongside those (in euros) we have a trio of issuers that have either already indicated small deal sizes (with no grow) or are unlikely to surprise with a deal of significant volume. In the former camp German regional player Free and Hanseatic City of Hamburg is bringing a EUR500m 5yr whilst French rail transport issuer Ile de France Mobilites is looking at a longer dated line (15yr) and in green format for its own EUR500m transaction. Austrian motorway financier Autobahnen- und Schnellstraben-Finanzierungs-Aktiengesellschaft (ASFINAG) has not conducted a deal larger than EUR1bn in the last 10yrs (although did push to a EUR1.5bn 10yr all the way back in 2003 according to IGM data) and with that it seems unlikely it will do so today as it looks to launch a new 10yr benchmark.The dollar market is active once again with a trio of issuers offering up four individual lines. The Abu Dhabi Developmental Holding Company PJSC has opted for a 7yr/30yr dual tranche combination which comes on the back of a 5yr/10yr combo that priced in late April 2024. On that occasion 35bp apiece was stripped from IPTs and the individual lines were each sized at USD1.25bn. Back to today and that is the exact volume that Canadian pension issuer PSP Capital Inc is bringing at the 5yr tenor. It hasn't been seen in the USD market since Jun 2022 and has already tightened pricing from SOFR m/s+59 IPTs to a final spread of SOFR m/s+57 after IOIs were indicated in excess of USD2.7bn (which even if not improved upon is the highest order book the issuer has been able to build in the USD market).The Republic of Turkey rounds off the day's active deals with a Jan 2035 maturity that has kickstarted marketing at 7.125% area IPTs. The issuer has already conducted 10yr and 8yr lines in dollars so far this year with 50bp and 32.5bp of spread compression witnessed on those transactions respectively.Live DealsIssuerESG Deal TypeCCYAmount (mn)MaturityInitial Price TalkLatest Px TalkFinal PricingBook Size (mn)ASFINAG - Autobahnen- und Schnellstrassen Finanzierungs- AGEURTBD10/02/2034m/s+38a--1,000Free and Hanseatic City of HamburgEUR50010/02/2029m/s+16-m/s+151,100Ile de France Mobilites (Syndicat des Transports d'Ile de France)GreenEUR50010/04/2039OAT+33a--Awaiting UpdateKingdom of DenmarkEURTBD10/02/2026BKO+17a--Awaiting UpdateThe Ministry of Finance of the People’s Republic of ChinaEURTBDm/s+65a--Awaiting UpdateThe Ministry of Finance of the People’s Republic of ChinaEURTBDm/s+45a--Awaiting UpdateAbu Dhabi Developmental Holding Company PJSCUSDTBD10/02/2031T+115a--Awaiting UpdateAbu Dhabi Developmental Holding Company PJSCUSDTBD10/02/2054T+150a--Awaiting UpdatePSP Capital Inc.USD1,25010/02/2029SOFR m/s+59a-SOFR m/s+572,700Republic of TurkeyUSDTBD01/03/20357.125%a--Awaiting Update** The Kingdom of Denmark has popped onto screens (a day later than we expected) with a proposed 2yr transaction. We had anticipated seeing this appear on screens Tuesday, directly on the back of investor calls. The 2yr tenor is one that is seen infrequently in the euro SSA sector (as a whole) and even less so in the sovereign sphere. That said, Denmark has been absent from non-domestic capital markets for a number of years, only returning to the EUR market in Nov 2022 for a 2yr deal sized at EUR1.5bn and which is now in need of refinancing.** Ile de France Mobilites becomes the latest French issuer to test the waters. Bpifrance (EUR1.5bn 5yr social), CCCIF (EUR500m short 4yr) and SdGP (EUR1bn 21yr green) were the last 3 French names to come to the market and they have each done so into robust order books of EUR8.2bn, EUR3.1bn and EUR7.5bn respectively for cover ratios ranging from 5.47x to 7.5x. The practice of pricing over OATs (whilst OATs have underperformed since election effects) has meant that spreads over mid-swaps for French issuers are still looking cheap relative to issuers from other jurisdictions.** On the back of investor calls/meetings based out of Paris The Ministry of Finance of the People's Republic of China has opened books for a EUR benchmark 2-part fixed rate senior unsecured RegS only note. IPTs on the 3yr tranche have been circulated at m/s+45a and on the 7yr tranche at m/s+65a. Early order updates suggest that the book was already in excess of EUR8.6bn (incl. EUR4.638bn JLM interest) at ca. 11:47 HKT/SGT (that's 4:47am London time). China had targeted the same maturities when it previously reached out to EUR investors with a successful EUR4bn 3-part exercise in November 2021, having also bolted on a 10yr tranche on that occasion. The 7yr and 10yr tranches of that trade are included on the official comps list as follows:China - Key compsSecurityB ISpdCHINA 0⅛ 2843CHINA 0⅝ 3373HKINTL 3⅜ 2741HKINTL 3⅜ 3155Those valuations indicate that the sovereign is offering modest premiums of ca. 7bp (3yr) and 5bp (7yr) versus its curve at IPTs, according to our earlier piece from our Asian Credit team.The timing of the transaction could arguably not be better, following Tuesday’s well-documented policy stimulus, whereby the PBoC announced a cut in its 7-day reverse repo rate (to 1.5% from 1.7%), a reduction to the RRR by 50bps to 9.5% and also a raft of additional measures including a reduction in the minimum down-payment for second homes to 15% from 25%. The stimulus triggered a stampede for Chinese risk which has continued this session, with the Hang Seng and CSI300 stock indices up by 0.68% and 1.48% (having been up by 2.01% and 2.13% as of around midday HKT/SGT), after both bellwethers rallied by over 4% the prior day.---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.

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EU stocks look set for a steady start to Friday’s payroll session as markets attempt to stabilise following Thursday’s dreadful session for both stocks and bonds.US indices fared particularly badly as weakness in big tech weighed on Nasdaq (-2.76%) and S&P (-1.86%) with those losses enough to make it a red October for both indices while also bringing a 5-month win streak to an end for the S&P.Following that, HK and mainland China equities improved overnight although Nikkei fell as players adjusted positions ahead of payrolls and next week’s US election. Hang Seng is currently up around 0.8% while Nikkei closed 2.63% in the red. Elsewhere, US treasuries have stabilised during Asian hours, likely reflecting some short covering following recent weakness.Otherwise to note, and following after-hours earnings updates, stock in Apple is down, partly chalked to concerns over future sales following a tepid forecast, while Amazon is up on a profit beat.Turning to the main event and US NFPs are expected to show that the pace of job creation moderated sharply in Oct (BBG median +100K; Sep +254K) although the whisper number is higher. Average hourly earnings are forecast to increase at a marginally slower rate. Also due is the Oct ISM manufacturing survey where a slight improvement is expected, albeit to a still contractionary level of 47.6.Ahead of that comes UK manufacturing PMI. Already out, UK Oct Nationwide House Prices showed a smaller than expected MoM rise of 0.1%, leaving the YoY change at 2.4%.Aside from payrolls, residual month-end flows also add to the potential for volatility and/or erratic price action today.Crude prices will also be in focus into the weekend where Brent is up to 1.6% firmer today following reports that Iran is preparing a retaliatory strike on Israel from Iraq.There’s no major auction supply on tap but it will be worth keeping an eye on gilts after the post-budget sell-off and fiscal jitters intensified Thursday to push the 10yr UK yield up to 17.9bps higher to a fresh YTD peak of 4.53% before closing at 4.45%.For more on latest developments see the European Breakfast Briefing.Friday’s supply prospectsThe pipeline is currently empty going into the final session of the week and the first day of November. Given the sharp sell-off in stocks and bonds on Thursday, we are not expecting anything to pop up on Friday either. That after euro supply was limited to EUR2.375bn on Thursday via deals from IG-rated LVMH and a duo of previously pipelined high-yield names. They put the overall weekly single currency haul at EUR25.125bn, still short of last week’s final EUR28.975bn. Of this week’s total IG issuers have accounted for EUR22.75bn, comfortably more than the EUR19.5bn average guess recorded in our latest issuance poll.While US high-grade corporate issuance ended the month on a high note, with 10 issuers raising USD20.55bn over the last couple of sessions, the same cannot be said for the broader markets where the three major indices suffered through their worst day in months and Treasury yields continued to rise. For more colour see THE ENDGAME.What to watch today - US payrolls** Key Data: UK Oct F S&P Global Manufacturing PMI (09:30), US Oct Change in Nonfarm Payrolls (12:30), US Oct Unemployment Rate (12:30), US Oct Average Hourly Earnings (12:30), US Oct F S&P Global Manufacturing PMI (13:45) and US Oct ISM Manufacturing (14:00)** Key Events: Fed’s Logan (13:45) speaks** Auctions: No major term auctions scheduled for Friday 1st Nov** Earnings: 13 S&P500 companies reportAll times GMT---- Subscribe to read more ---- To receive this analysis plus much more, subscribe to IGM. Request your free trial of the service today.