PACIFIC NATGAS: Cali Natgas Fundamentals Lean Bearish

Four of the five major regional Fed manufacturing surveys deteriorated in April (Philadelphia, Richmond, Kansas City, Dallas - the exception was New York which was still very weak) versus March.

• This dragged the average of the 5 indices to the lowest since May 2020. At that time, the ISM Manufacturing index was in the low 40s.
• Average forward-looking expectations fell to the lowest since October 2022 on average in the 5 Fed surveys.
• This was the 3rd consecutive sequential deterioration in the 5-Fed index average, and we would expect the April ISM Manufacturing index to do likewise in April (50.9 in January, 50.3 in February, 49.0 in March).
• Current consensus is for ISM manufacturing (out Thursday at 1000ET) to print 48.0 in April, but we would see the risks to this firmly to the downside.

$17.025B to price Monday:

• Date $MM Issuer (Priced *, Launch #)
• 04/28 $5B #Alphabet  $750M 5Y +32, $1.25B 10Y +47, $1.5B 30Y +62, $1.5B 40Y +70
• 04/28 $2.5B #Philip Morris $750M 3Y +58, $400M 3Y SOFR+83, $750M 5Y +75, $600M 10Y +93
• 04/28 $2B #Keurig Dr Pepper $500M each: 1.5Y SOFR+58, 3Y +68, 5Y +83, 10Y +98
• 04/28 $1.25B #Procter & Gamble $700M 5Y +28, $550M 10Y +43
• 04/28 $1.125B #Consumer Energy $500M +5Y +67, $625M 10Y +87
• 04/28 $1.1B #Northern States Power $600M 10Y +83, $500M 30Y +98
• 04/28 $1.1B #CBRE Services $600M 5Y +120, $500M 10Y +135
• 04/28 $750M #General Dynamics 10Y +78
• 04/28 $700M *Posco Holdings $400M 5Y +137.5, $300M 10Y +157.5
• 04/28 $700M *Kookmin Bank $400M 3Y +77.5, $300M 5Y +82.5
• 04/28 $500M #Colgate Palmolive 5Y +38
• 04/28 $500M #DR Horton +5Y +103
• 04/28 $Benchmark Goldman Sachs investor calls

European yields backed up slightly Monday, reversing the modest declines seen Friday.

• Various factors weighed on core FI in a session that was devoid of market-moving data (Spanish Q1 unemployment saw a notable uptick).
• These factors included slightly more positive risk-on tone on US tariffs coming in from the weekend, and reports Monday morning of a Ukraine proposal for a full 30-day ceasefire with Russia.
• While a widespread Spanish and Portuguese energy blackout made headlines, the market impact was limited.
• The German and UK curves both bear steepened, though Schatz/Bobl notably underperformed their UK counterparts.
• Periphery/semi-core EGBs were mixed and little changed on the day.
• The April Eurozone flash inflation round starts Tuesday with Spain - MNI's preview is here.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 2.3bps at 1.742%, 5-Yr is up 4.2bps at 2.059%, 10-Yr is up 5.2bps at 2.521%, and 30-Yr is up 5.8bps at 2.947%.
• UK: The 2-Yr yield is up 0.8bps at 3.866%, 5-Yr is up 1.2bps at 3.986%, 10-Yr is up 3bps at 4.509%, and 30-Yr is up 5.1bps at 5.27%.
• Italian BTP spread up 0.3bps at 110.8bps  / Spanish spread up 0.6bps at 66bps