EU CREDIT UPDATE: Average Cash Moves

• Size: E5bln (above MNI's E3-4bln expectation)
• Books closed in excess of E43bln (inc E2.2bln JLM interest)
• Spread set: MS + 26bp (guidance was MS +28bps area)
• Hedge Ratio: 100% vs 2.90% Feb-36 Bund
• Coupon: Short first
• Maturity: 18 June 2036
• ISIN: IE000O6GBYC9
• Bookrunners: Barclays (B&D/DM), BofA Securities, Cantor Fitzgerald Ireland, Goodbody, J.P. Morgan and NatWest
• Settlement: 21 January 2026 (T+5)
• Timing: Hedge deadline 12.50 London / 13.50 CET. 

From market source / MNI colour

• Date $MM Issuer (Priced *, Launch #)
• 01/14 $5B #KFW 5Y SOFR+29
• 01/14 $2B #IFC 3Y SOFR+22
• 01/14 $1B #AfDB WNG 10Y SOFR+41
• 01/13 $Benchmark CABEI 3Y +49
• 01/14 $Benchmark CDP Fncl 5Y SOFR+42
• 01/14 $Benchmark ANZ NZ 3Y +75a, 3Y SOFR, 5Y SOFR
• Expected Thursday:
• 01/14 $Benchmark OPEC Fund 5Y SOFR+60a
• 01/15 $Benchmark Nordic Investment Bank 5Y SOFR+30a
• $11B Priced Tuesday, $21.4B/wk

Chinese goods trade growth handily exceeded consensus in December, according to data released overnight. Export growth of 6.6% Y/Y was above the 3.1% consensus and last month’s 5.9%. Import growth also rose 5.7% Y/Y (vs 0.9% cons, 5.7% prior), the fastest rate since September. That widened the single-month trade balance to a 6-month high of $114.1bln, with the annual surplus at a record $1.19trln. If China’s ongoing push to strengthen domestic demand is successful, it should counter continued expansion of its external surplus. However, this prospect remains uncertain, and with the yuan still competitive in real terms (owing to weak domestic inflation trends), the burden of generating GDP growth may yet fall back on the export sector.

• For more on China’s likely policy mix and challenges in 2026, see our Policy Team’s exclusive interview with a member of the PBOC's Monetary Policy Committee here and here.
• Familiar themes were at play in December, with exports to the US sharply negative on a Y/Y basis and trends elsewhere remaining solid.  The US now accounts for just 11.1% of China’s 12m rolling exports.
• Of course, transhipment remains a likely dynamic at play – the widening in Vietnam’s goods trade surplus with the US remains almost a mirror image of its deficit with China.
• 3mma Y/Y export growth to the EU and the UK was 9.1% and 5.4% respectively in December. That keeps disinflationary trade diversion concerns prevalent in the likes of the UK and the Eurozone (even though some hawks on the ECB Governing Council have played down this risk). BOE’s Taylor wrote today that the BOE “has considered various scenarios and estimates that trade diversion could lower inflation in the UK by some 0.2 percentage points in 2026 and 2027, abating to 0.1 percentage points in 2028, most via lower import prices”