CREDIT PRE-MARKET: EUR Market Wrap
- 2y/10y bunds closed -6bp/-5bp as French political uncertainty continues to weigh on EGB spreads while prompting a bid in bunds. BTPs and OATs both 5bp wider vs. 10y bunds.
- Main/XO were +3bp/+9bp while €IG/€HY were +2bp/+9bp to bring moves since Friday’s close to +3bp/+19bp with 1-3yr spreads underperforming +10yr spreads by 3bp so far this week and Energy and Fins taking the brunt of the move at +4bp/+6bp.
- SXXP was -0.9% with Banks, Basic Resources and RE ~2% lower vs. the SPX which was +0.3%. Notable €IG movers included Naturgy -15%, Apple +7%, Covestro +7%, Naturgy -15%, Maersk -7%, Icade -7%. Stoxx 50 futures are +0.3%.
- Up today:
GMT/Local | Impact | Country | Event |
0600/0700 | ** | UK | UK Monthly GDP |
0600/0700 | ** | UK | Trade Balance |
0600/0700 | ** | UK | Index of Services |
0600/0700 | *** | UK | Index of Production |
0600/0700 | ** | UK | Output in the Construction Industry |
0600/0800 | *** | DE | HICP (f) |
0900/1000 | * | UK | Index Linked Gilt Outright Auction Result |
0930/1130 | EU | ECB's Schnabel at German Finance Committee | |
1100/0700 | ** | US | MBA Weekly Applications Index |
- | *** | CN | Money Supply |
- | *** | CN | New Loans |
- | *** | CN | Social Financing |
- | UK | Sky News- Election Leaders Event | |
1230/0830 | *** | US | CPI |
1230/0830 | * | CA | Intl Investment Position |
1300/1500 | EU | ECB's De Guindos at MNI Connect Event | |
1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
1600/1200 | *** | US | USDA Crop Estimates - WASDE |
1800/1400 | ** | US | Treasury Budget |
1800/1400 | *** | US | FOMC Statement |
1915/1515 | CA | BOC Governor Macklem speaks at panel in Montreal. |
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EUROZONE ISSUANCE: EGB Supply - W/C 13 May (2/2)
- Spain will look to hold a Bono / Obli auction on Thursday. On offer will be the on-the-run 3-year 2.50% May-27 Bono (ISIN: ES0000012M77), the on-the-run 5-year 3.50% May-29 Bono (ISIN: ES0000012M51) and the 1.00% Jul-42 Green Obli (ISIN: ES0000012J07). We look for E5.5-6.5bln on offer with the amount confirmed this afternoon.
- We had also expected the on-the-run 10-year 3.25% Apr-34 Obli (ISIN: ES0000012M85) to be on reopened and we think its omission makes a launch of a new 10-year Obli via syndication either in late May or early June more likely.
- France will then look to hold a MT OAT auction on Thursday with E10.5-12.0bln on offer across the on-the-run 3-year 2.50% Sep-27 OAT (ISIN: FR001400NBC6), the 2.75% Feb-29 OAT (ISIN: FR001400HI98), the on-the-run 5-year 2.75% Feb-30 OAT (ISIN: FR001400PM68) and the 2.50% May-30 OAT (ISIN: FR0011883966) on offer.
- Later on Thursday, France will conclude issuance for the week E1.5-2.0bln of IL OATs on offer. On offer will be the 0.10% Mar-29 OATei (ISIN: FR0013410552), the 0.10% Jul-53 OATei (ISIN: FR0014008181), the 0.10% Mar-28 OATi (ISIN: FR0013238268) and the 0.10% Mar-32 OATi (ISIN: FR0014003N51).
EUROZONE ISSUANCE: EGB Supply - W/C 13 May (1/2)
The Netherlands, Germany, Spain and France are all due to hold auctions this week while the EU is scheduled to hold a syndication. Also on the syndication side, we see Austria and the ESM (or possibly EFSF) as the most likely candidates to hold transactions in our view. We pencil in estimated gross issuance for the week at E42.7bln, up from E19.5bln this week.
- The EU has a syndication scheduled for the week ahead with an RfP having been sent out already. The most likely new bonds would be conventional 15/30-year EU-bonds but the EU could also choose to just tap existing issues.
- The Netherlands will kick off auctions for the week tomorrow with E1.5-2.0bln of the off-the-run short 5-year 0% Jan-29 DSL (ISIN: NL0015000LS8) on offer.
- Also tomorrow, Germany will come to the market to look to sell E5bln of the 2.90% Jun-26 Schatz (ISIN: DE000BU22056).
- Germany will return to the market on Wednesday with a 30-year Bund auction. E1bln of the 1.80% Aug-53 Bund (ISIN: DE0001102614) will be on offer alongside E1bln of the 2.50% Aug-54 Bund (ISIN: DE000BU2D004).
EUROZONE T-BILL ISSUANCE: W/C May 13, 2024
Germany, France, Spain, Finland and Portugal are due to sell bills this week. We expect issuance to be E15.7bln in first round operations, down from E30.8bln last week.
- This morning, Germany will look to issue E3bln of the new 12-month May 14, 2025 bubill.
- This afternoon, France will look to issue up to E7.1bln of the 13/26/49-week BTFs: E3.2-3.6bln of the new 13-week Aug 14, 2024 BTF, E1.5-1.9bln of the 26-week Nov 14, 2024 BTF and E1.2-1.6bln of the 49-week Apr 24, 2025 BTF.
- Tomorrow morning, Spain will look to sell the 3-month Aug 9, 2024 letras and the 9-month Feb 5, 2025 letras, with amounts to be confirmed on Monday.
- Also tomorrow, Finland will look to come to the market with up to a combined E2bln of the 6-month Nov 13, 2024 RFTB and the 9-month Feb 13, 2025 RFTB.
- Finally on Wednesday, Portugal will look to sell a combined E1.25-1.50bln of the new 6-month Nov 22, 2024 BT and the new 12-month May 16, 2025 BT.
For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.
