POWER: PPA Connection Freeze Strains Greek Renewables

Downticks in e-minis provide some cross-market support for bonds in recent trade.

• Pressure in U.S. tech names noted pre-market, with Meta (-1.3%) weaker after news that the company’s chief AI scientist is set to leave, while Nvidia (-2.0%) struggles after Softbank sold a stake in the name.
• Gilts remain the outperformer in the wake of this morning’s soft labour market data.

The number of insolvent German firms rose by 5% M/M in October to 1,553, up 2% Y/Y and 68% higher than the average October through 2016-19 according to institute IWH Halle. A “notable” decline by the end of the year will likely be only temporary, the institute adds.

• The number of jobs impacted by the largest insolvency proceedings, which IWH views as a good approximation for the total number at risk, stood at around 13000 in October, a 36% decrease vs September but up 56% vs the October average of 2016-19. Recent domestic job cut announcements of large German manufacturing firms arguably have weighed on consumer sentiment in the country.
• On balance, the insolvency data supports the narrative that weakness in German hard data currently continues. We look to see how this develops with surveys seeing outperformance of expectations components vs current conditions indices, as illustrated by today's ZEW readings. Analysts as well as the government see this optimism filtering through to realised activity ultimately by next year.

SFIH6 96.60/96.75/96.90 call fly x 2 vs. 96.30/96.00 put spread paper paid 0.75 on 7.5K.