MNI EU Credit Weekly: Join The Dots

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Executive Summary: 

• Spreads tightened 1.5bp this week, with the rates cycle continuing to underpin risk sentiment. That was evident from primary pricing, with higher yielding instruments meeting strong demand.
• In macro, a hawkish FOMC meeting and Initial Jobless Claims data triggered a reverse of some of the recent flattening.
• Next week has EU/US PMI and US GDP data scheduled.
• USD and EUR IG fund flows turned slightly negative, while a big inflow to USD equities stood out.
• Supply rose to nearly €14bn with a corresponding drop in cover ratios. Average NICs were flat or -2bp excluding SFCARR. Bloomberg’s primary survey implies similar expectations for next week.