MNI Credit Weekly: After Shock
Mar-14 15:52By: Donal Golden and 5 more...
Utilities+ 14
Executive Summary:
- EUR spreads widened 6bp this week, almost matching the move in USD spreads, having outperformed of late; it felt like a delayed reaction, with a culmination of events finally spilling over. Primary NICs turned meaningfully positive, a signal of deteriorating technical conditions. Poor performance on the break also hurt sentiment.
- Macro volatility remains elevated, with tariff headlines ongoing and likely here to stay. USTs were little changed on the week, while DBR yields were higher with debt brake reforms progressing.
- EUR IG fund flows remained firm while USD IG and HY both saw outflows.
- Primary supply was higher this week at €10bn, but unsurprisingly this was less than expected given market volatility. Surveyed expectations have little changed supply next week, but a bigger skew to Covered/SSA looks likely.