EM CEEMEA CREDIT: PKNPW: targets hitting the tape

Italian industrial production was unchanged in October, meeting consensus expectations. September’s reading was revised a tenth higher to -0.3% M/M. However, on a 3m/3m basis, production fell for a second consecutive month to -0.7% (vs -0.6% prior) and recent sentiment data suggests the stagnation in Italian industry is set to continue through Q4 and into 2025.

• In its latest projection round, ISTAT noted that “the declining trend in industrial production, driven by the weakness of the German economy—Italy's primary export market—and the crisis in specific production sectors (predominantly automotive), has negatively impacted gross fixed investments and imports”.
• Indeed, intermediate and capital goods production were both negative on a 3m/3m basis again in October. Meanwhile, consumer goods production was positive for the first month since February at 0.3% 3m/3m (vs -0.9% prior).

• The German Bund has seen a good rejection at the initial short term retracement in Yield noted at 2.14%, printed a 2.143% high for the session.
• While early volumes were on the lower side on the earlier push lower, there was clearly a pick up in dip buying with over 20k contracts exchanging hands within a 10 minutes window (see chart), triggering the initial bounce and the subsequent recovery back above the 136.00 figure.
• There hasn't been any new obvious driver especially looking at STIRs and Equities, these have mostly traded within tight ranges, lower Volumes are helping exacerbate some of the moves in Govies.