MNI EU Credit Weekly: Jumbo Supply

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Executive Summary: Jumbo Supply

• Spreads finished the week 4.6bp wider. We started Monday on an optimistic tone helped by the US-China trade truce. Supply was this week’s dominant story, with jumbo deals from GOOGL, ORAFP and BMY boosting notional issuance. Earnings showed certain cyclical sectors, particularly Chemicals, remain in a trough.
• Macro remains highly sensitive to lower tier data given the ongoing shutdown. Rates finish the week little changed; an initial hawkish reaction to the FOMC gave way to risk off later in the week.
• Fund flows increased in IG but fell away for HY. In equities, US and Chinese strength contrasted with European outflows.
• Supply was significant; by our tracking this was the busiest week for our €IG perimeter in terms of volume (€36.7bn) since we began tracking in Jan 2024. NICs expanded accordingly to an average of 6bp. Expectations are similar for next week.