MNI Credit Weekly: Back to the Future

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Executive Summary: 

• EUR spreads widened 24bp as the Rose Garden announcements upended risk markets. Widening was mostly indiscriminate; Real Estate was a clear outperformer, but Utilities widened almost in line despite defensiveness and low exposure to tariffs.
• Despite the Liberation Day tariffs macro priced out inflation expectations, as growth fears and flight to quality dominated. Our policy team interviewed Stephen Miran who hinted that there is room for negotiation.
• Fund flows to Wednesday turned to small outflows in EUR credit while local equities continued to see inflows.
• Volatility cut primary after the first two days of the week, with €5bn priced. NICs hit double digits for the first time in almost a year. Supply expectations for next week are naturally subdued.