MNI Credit Weekly: Hitting the Brakes

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Executive Summary: 

• EUR spreads widened just 1bp overall despite the tariff drama. Sector dispersion increased with small gains for Real Estate, while Autos were 4bp wider.
• In macro, market reaction to trade headlines appears to be lessening. The bund curve bull steepened while we had slight bear steepening in treasuries. Soft economic data remains in tension with inflationary policy concerns.
• EUR IG and HY returned to small inflows while USD IG turned to small outflows. Equities saw sizeable weakness in US, yet Europe continued to set its 7th straight week of inflows.
• Understandably given volatility, primary fell short of expectations at €11bn. Surveys show a slight increase expected for next week.