CREDIT PRE-MARKET: EUR Market Wrap
• 2y/10y bunds ended -3bp/-6bp after bunds and gilts held onto the majority of their post- UK CPI gains before tightening further into the close in line with USTs.
• Main/XO tightened 0.7bp/3.3bp, underperforming CDX IG/HY by 0.4bp/0.7bp. €IG/€HY cash ended -1.2bp/+1.5bp.
• SXXP ended +0.4% with most sectors in the green (Media, Tech, Retail all +1%) though Food & Bev underperformed at -0.4% with the 7% loss at Heineken partially offset by the 7% gain at Coca-Cola HBS.
• Up today we have:
Time C Event
07:00 UK GDP, IP, Gov't Spending, Trade Data etc.
08:00 SP CPI
08:00 EC ECB's Lagarde
08:30 SP ECB's Hernandez de Cos
09:00 IT Trade Balance, Gov't Debt
10:00 EC EU Commission Economic Forecasts
12:00 EC ECB's Lane
13:00 UK BOE's Megan Greene
13:30 US Jobless/Continuing Claims, Empire Manufacturing, Retail Sales, Trade
13:50 UK BOE's Catherine Mann
14:15 US IP/Capacity Utilisation/Manufacturing Production
15:00 US Business Inventories, NAHB Housing Market Index
18:00 EC ECB's Nagel
18:15 US Fed's Waller
| Curncy | Bond Type | Issuer | Rank | Ticker | B'mark | Amount (bn) | Spread (bp) | Δ IPT (bp) | BBG NIC (bp) | Cover (x) |
| EUR | TelCo | VERIZON COMMUNICATIONS | Sr Unsecured | VZ 3 1/2 06/28/32 | MS | 1.00 | 90 | 35 | -4.4 | 2.3 |
| EUR | TelCo | VERIZON COMMUNICATIONS | Sr Unsecured | VZ 3 3/4 02/28/36 | MS | 1.00 | 108 | 37 | 1.8 | 3.4 |
| EUR | Services | ALD SA | Sr Preferred | ALDFP 3 7/8 02/22/27 | MS | 1.00 | 105 | 23 | 8.7 | 2.4 |
| GBP | Utilities | EASTERN POWER NETWORKS | Sr Unsecured | UKPONE 5 3/8 02/26/42 | B | 0.35 | 87 | 21 | N/A | 5.4 |
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Historical bullets
UK DATA: Private wages slightly softer than consensus, much softer than BOE exp
- The private sector regular pay numbers at 6.5%Y/Y in the 3-months to November are marginally softer than the expectations from the previews we had read - but notably softer than the 7.2% the BOE has pencilled in for next month's release (there was no BOE expectation for today's release).
- HMRC payrolls are also a bit softer than expected while the unemployment rate was largely unchanged - but we don't pay much attention to the latter as it is still using the flawed methodology with the ONS not introducing the new methodology yet.
- GBPUSD down to intraday low - falling around 20 pips in the initial kneejerk to a low of 1.2663 (but back up to 1.2674 at writing).
MNI: NORWAY NOV MAINLAND GDP -0.2% M/M, AGG GDP +1.2% M/M
- MNI: NORWAY NOV MAINLAND GDP -0.2% M/M, AGG GDP +1.2% M/M
BTP TECHS: (H4) Support At The 50-Day EMA Remains Exposed
- RES 4: 122.63 High Dec 7 2022 (cont)
- RES 3: 122.18 3.00 proj of the Nov 10 - 17 - 24 price swing
- RES 2: 121.43 2.764 proj of the Nov 10 - 17 - 24 price swing
- RES 1: 119.77 High Jan 4
- PRICE: 118.50 @ Close Jan 15
- SUP 1: 117.24 Low Jan 05
- SUP 2: 116.36 50-day EMA
- SUP 3: 115.18 Low Dec 4
- SUP 4: 114.10 50.0% retracement of the Oct 19 - Dec 27 bull cycle
The recent move down in BTP futures appears to be a correction. However, price has recently traded through support around the 20-day EMA and this signals scope for a continuation lower near-term, potentially towards the 50-day EMA at 116.36 - a key support. Initial firm resistance has been defined at 119.77, the Jan 4 high. Key resistance and the bull trigger is at 121.43, the Dec 27 high.
