CREDIT PRE-MARKET: EUR Market Wrap
- Bunds ended broadly flat after seeing a limited reaction to the UK budget/remit announcement or headlines from the US (re. Powell's semi-annual testimony speech summary, ADP employment change) though yields tightened at the close on NYCB headlines.
- Main/XO finished -1.4bp/-4.8bp while €IG/€HY cash underperformed at flat/-2bp with even performance across €IG tenors and Energy the only sector in the green at -1bp while Media underperformed slightly at +0.6bp.
- SXXP ended +0.4% with the Tech, Chemicals, Energy & Fin Services sub-indices all ending over +1% while Media underperformed at -0.6% with Embracer group again underperforming on their Saver subsidiary sale. Other notable movers include Encavis (+18% on acquisition talks) and Grifols (-11% as flagged).
- Bloomberg’s DM Asia index is broadly unchanged though Japan/ is -1.2% after the yen rallied to below 149 per USD, aided by accelerated wage growth. Stoxx 50 futures are flat. Up today we have:
| GMT/Local | Impact | Country | Event |
| 0645/0745 | ** | CH | Unemployment |
| 0700/0800 | ** | DE | Manufacturing Orders |
| 0930/0930 | UK | BOE's Monthly Decision Maker Panel Data | |
| - | *** | CN | Trade |
| 1315/1415 | *** | EU | ECB Deposit Rate |
| 1315/1415 | *** | EU | ECB Main Refi Rate |
| 1315/1415 | *** | EU | ECB Marginal Lending Rate |
| 1330/0830 | *** | US | Jobless Claims |
| 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 1330/0830 | * | CA | Building Permits |
| 1330/0830 | ** | US | Trade Balance |
| 1330/0830 | ** | US | Non-Farm Productivity (f) |
| 1330/0830 | ** | CA | International Merchandise Trade (Trade Balance) |
| 1345/1445 | EU | ECB Monetary Policy Press Conference | |
| 1500/1000 | US | Fed Chair Jay Powell | |
| 1500/1600 | EU | ECB Podcast - Lagarde presents latest monpol | |
| 1530/1030 | ** | US | Natural Gas Stocks |
| 1630/1130 | US | Cleveland Fed's Loretta Mester | |
| 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 1700/1200 | US | BLS webinar on CPI rent and OER | |
| 2000/1500 | * | US | Consumer Credit |
| 2350/0850 | ** | JP | Trade |
| Ticker | Issuer | FIGI | Initial Pricing Date | Sector | Curncy | Amt Issued | Original Tenor | Cpn Typ | Fin Gdnc Str For Init Issnc | Spread Tightening (at syndication) | Spread Against | Launch Spread |
| POMFP 4 7/8 03/13/29 | CIE PLASTIC OMNIUM SE | BBG01LTG1Q51 | 06/03/2024 | Consumer, Cyclical | EUR | 500000000 | 4.999315537 | FIXED | 5% | 43.75 | MS | 228.6 |
| BARUK Float 03/13/29 | BARCLAYS BANK UK PLC | BBG01LTWJ1M3 | 06/03/2024 | Financial | GBP | 500000000 | 4.999315537 | FLOATING | SONIO/N + 47 | FRN | 47 | |
| CMZB 3 03/13/34 | COMMERZBANK AG | BBG01LTWW095 | 06/03/2024 | Financial | EUR | 1000000000 | 9.998631075 | FIXED | MIDSWAPS + 38 | 6 | MS | 38 |
| BGOSK 4 03/13/32 | BANK GOSPODARSTWA KRAJOW | BBG01LTXTQS9 | 06/03/2024 | Financial | EUR | 1000000000 | 8 | FIXED | MIDSWAPS + 140 | 20 | MS | 140 |
| VALMTF 4 03/13/29 | VALMET CORP | BBG01LSZ2T17 | 06/03/2024 | Industrial | EUR | 200000000 | 4.999315537 | FIXED | MIDSWAPS + 133 | 17 | MS | 133 |
| TELEFO 5.7522 PERP | TELEFONICA EUROPE BV | BBG01LV3QX00 | 06/03/2024 | Communications | EUR | 1100000000 | VARIABLE | 5.75% | 50 | B | 348.2 |
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EUROZONE T-BILL ISSUANCE: W/C February 5, 2024
Spain, Belgium, the ESM, the EU and Italy are still due to sell bills this week, while Germany, the Netherlands, and France came to the market yesterday. We expect issuance to be E29.3bln in first round operations, up from E15.1bln last week.
- This morning, Spain will look to sell a combined E4.5-5.5bln of the 6-month/12-month letras: the 6-month Aug 9, 2024 letras and the new 12-month Feb 5, 2025 letras.
- Also this morning, Belgium will look to sell a combined E1.8-2.0bln of Short/Long TCs: An indicative E800mln of the 3-month May 9, 2024 TC and an indicative E1.2bln of the11-month Jan 9, 2025 TC.
- Also today, the ESM will look to sell up to E1.1bln of the new 3-month May 9, 2024 bills.
- Tomorrow, the EU will look to issue up to E1.0bln of the 3-month May 10, 2024 EU-bill and up to E1.5bln of the new 6-month Aug 9, 2024 EU-bill.
- Finally on Friday, Italy will look to sell the 12-month BOT, with details to be confirmed later today.
BTP TECHS: (H4) Support 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: 119.27/77 High Jan 30 / 4
- PRICE: 117.41 @ Close Feb 5
- SUP 1: 116.98 Low Jan 25 and the bear trigger
- SUP 2: 115.70 Low Dec 8
- SUP 3: 114.10 50.0% retracement of the Oct 19 - Dec 27 bull cycle
- SUP 4: 113.31 Low Nov 28
BTP futures remain below last week’s high of 119.27 on Jan 30. The contract has recently traded above the 20-day EMA and pierced the Jan 12 high of 119.23. A clear break above 119.23 would highlight a base and a potential resumption of the primary uptrend. For now, attention is on key support at 116.98, the Jan 25 low. Clearance of this level would confirm a resumption of the recent bearish cycle and open 115.70, the Dec 8 low.
USDJPY TECHS: Trend Needle Points North
- RES 4: 150.78 High Nov 17
- RES 3: 149.75 High Nov 22
- RES 2: 149.16 76.4% retracement of the Nov 13 - Dec 28 bull leg
- RES 1: 148.89 High Feb 05
- PRICE: 148.42 @ 06:32 GMT Feb 6
- SUP 1: 146.99/145.90 20-day EMA / Low Feb 1 and key support
- SUP 2: 145.59 Low Jan 16
- SUP 3: 144.36 Low Jan 12
- SUP 4: 143.42 Low Jan 9
The USDJPY trend outlook is bullish and Friday’s strong rally reinforces this condition. Key resistance at 148.80, the Jan 19 high, has been pierced. A clear break of this hurdle would confirm a resumption of the uptrend that started late December and open 149.16, a Fibonacci retracement point. The break higher would also signal scope for gains towards 149.75, the Nov 22 high. Key short-term support lies at 145.90, the Feb 1 low.
