MNI EU Credit Weekly: More of the Same

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Executive Summary: 

• Spreads widened around 1bp, with low dispersion, but signs of weakness increasing into the weekend. After a strong run for riskier instruments, some of this week’s deals have performed poorly on the break.
• Macro remains dominated by politics with the US shutdown continuing. Prospects of a snap election in France have eased with a new PM set to announced.
• Fund flows continued into credit and most equity markets, with particular strength in EUR IG.
• Supply was again muted in the pre-earnings blackout period. Aggregate NICs were higher but still marginally negative on average. Expectations for next week are slightly lower.