EM ASIA CREDIT: SK Hynix: GUI out

• US TSY 52W AUCTION: NON-COMP BIDS $1.116 BLN FROM $50.000 BLN TOTAL

This morning’s services PMI was weak, falling 5.5 points to 48.8 – the largest one month drop since April 2020. While less closely followed than the Economic Tendency Indicator, the PMI has still contributed to a 1.6bp fall in 2-year SEK swap rates today. 

• Thursday’s flash July CPI report will be key in determining the likelihood of a Riksbank August rate cut. Markets currently price just a 20% implied probability of such a move, but we have noted for several weeks that a cut cannot be ruled out before seeing the inflation data, particularly with activity signals still weak.
• Although new orders (51.5 vs 59.5 prior) and production (50.1 vs 57.3 prior) PMI components remained in expansionary territory in July, the falls relative to June were sharp.
• More alarmingly, the employment component fell to a 5-year low of 37.8 (vs 36.7 prior). The downward trend is more volatile than, but still broadly consistent with, the signal from the Economic Tendency Indicator’s services employment series. 

• Date $MM Issuer (Priced *, Launch #)
• 08/05 $500M CNA Financial WNG 10Y +125a
• 08/05 $500M Freedom Mortgage 7.75NC3
• 08/06 $500M Travel + Leisure 8NC3
• 08/05 $Benchmark MSCI 10Y +140a
• 08/05 $Benchmark Essential Utiites 10Y +130a
• 08/05 $Benchmark Macquarie Bank 11NC10 +170a
• 08/05 $Benchmark Standard Chartered 11NC10 +145a
• 08/05 $Benchmark Tennessee Valley Authority 5Y +25a
• 08/05 $Benchmark Daimler Truck 2Y +90a, +5Y +115a, +7Y +130a
• 08/06 $Benchmark PetSmart 7NC3, 8NC3 investor calls