MNI EU Credit Weekly: Nuuk Clear Deal

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Executive Summary: 

• Spreads whipsawed this week as negotiations over Greenland, and President Trump’s speech at Davos, created much volatility. XO was in a 15bps range but closed 0.75bps tighter on the week. Euro IG was +2 wider mid-week but closed 4bps off the wides.
• Macro saw continued weakness in the USD. Risk assets were volatile due to Greenland Tariff threats but ultimately recovered. Front-end futures in USD and GBP sold-off on reduced rate-cut expectations.
• Fund flows were on aggregate weaker for credit, but spotlight was on Chinese equities who faced their largest ever outflow.
• Supply eased to just over €11bn on the higher-volatility backdrop and beginning of pre-earnings blackouts. NICs moved back into positive territory. Corps/FIG supply expectations are slightly lower for next week.