EM CEEMEA CREDIT: OCPMR: primary dual tranche USD benchmark 5Y and L10Y with FVs

The long end leads Bund ASWs away from session lows, with spreads vs. 3-month Euribor last -0.3bp to +0.3bp.

• Softer-than-expected German services PMI data outweighed the firmer-than-expected manufacturing equivalent when it came to market reaction, with the latter aided by the well-documented fiscal developments.
• Elsewhere, the DFA has confirmed that it will sell EUR92.5bln of debt in Q225 (EUR62.5bln in bonds and EUR30bln in bills). We had previously suggested that the release would come too early to account for additional defence/infrastructure spending and expect related increases in issuance to start to filter in from Q3, at the earliest.
• That was in line with the wider sell-side train of thought as well.

• MNI: EZ MARCH FLASH MANUF PMI 48.7 (FCAST 48.2, FEB 47.6)
• MNI: EZ MARCH FLASH SVCS PMI 50.4 (FCAST 51.1, FEB 50.6)

The soft details of the German flash March services PMI has prompted a light dovish repricing in EUR rates, though ECB-dated OIS continue to assign a ~60% implied probability of a 25bp cut in April.

• OIS price 52bps of easing through year-end, up from 50bps before the PMI data.
• Euribor futures are now back to little changed through the blues.
• Although services activity remains subdued in Germany and France, there was a notable uptick in the manufacturing components in both PMIs. In Germany, this is likely to partly be a function of recent fiscal developments.
• MNI’s rough calculations suggest the Eurozone-wide flash manufacturing PMI, due at 0900GMT, could print close to neutral (i.e. 50) territory in March (vs 48.2 cons, 47.6 prior). That assumes countries excluding France and Germany also see an average ~2.5 point uptick relative to February. If the ex-France and Germany average manufacturing PMI was instead flat at 49.2, the Eurozone-wide PMI tracks at 48.8.
• Assuming the ex-France and German average PMI is unchanged at 53.9, we track the Eurozone-wide services flash unchanged at 50.6 (vs 51.1 cons).