MNI Credit Weekly: After Shock

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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.