• On the back of a solid pipeline, Tuesday delivered a heavy session in primary, with € IG seeing its busiest single day since July 6th (€18.35bn).
• € IG priced €17.85bn from 12 deals (3 x Corp, 5 x FIG & 4 x SSA), via 16 tranches.
  • WTD: €27.45bn / 67% share of the week's €40.9bn forecast.
• Sterling (£) priced £6.9bn, from 4 deals (2 x FIG & 2 x SSA) via 5 tranches; its busiest single day since June 9th (£10.85bn).
• The Swiss Franc & US$ Reg S markets remained quiet.
• Another robust day of supply is expected today on the back of a solid pipeline, punctuated by two large multi-tranche Reverse Yankee corporate deals.
• Focus remains on the ECB’s rate decision on Thursday (25bp hike expected).
• Brent Crude is currently trading at c.$98.86; (this time yesterday c.$97.96).
• The VIX has risen again slightly, currently trading at 15.72; up from this point yesterday (15.3).
• iTraxx Europe & iTraxx Senior & Sub financial indices are all higher than this point yesterday, sitting at 51.54 (+0.27%), 53.785 (+0.30%) & 86.701 (+0.24%) respectively.
• Pipeline: The European IG pipeline currently has 8 trades tabled in both €’s & Sterling.
  • 3 x € Corp (Uber 5-tranche & Parker-Hannifin 3-tranche)
  • 2 x € FIG (1 x covered)
  • 2 x € SSA
  • 1 x £ Corp (4-tranche from Amazon.com)

Key € IG Supply Stats from yesterday

• Corporate
  • Total IG: €5.4bn
  • Avg. tranche size €900m
  • Avg. IPT to Pricing -34
  • Avg. cover X 3.68
• FIG
  • Total IG: €5.35bn
  • Avg. tranche size €892m
  • Avg. IPT to Pricing -4.67 (covered) - €3.75bn
  • Avg. IPT to Pricing -27.17 (unsecured) - €1.6bn
  • Avg. cover X 2.13
• SSA
  • Total IG: €7bn
  • Avg. tranche size €1.75bn
  • Avg. IPT to Pricing -2.75
  • Avg. cover X 7.58

Geo-Political News

• US Destroys Iranian Oil Tankers. Tensions in the Middle East reached a new high point as US military forces carried out targeted air strikes on several Iranian oil tankers near Kharg Island. The military action was launched after American warships reported coming under repeated missile attacks in surrounding waters. Iran immediately retaliated by launching drone & missile strikes against US military assets stationed in Jordan, while also threatening broader action against American energy & maritime logistics across the region. These retaliatory strikes have heightened fears over critical maritime chokepoints. Consequently, Brent crude prices have risen further, approaching the $100 per barrel mark. The escalation introduces severe systemic risks to global energy supplies & raises broader inflation concerns for major importing nations.
• Threats to Red Sea Corridor. Cross-border regional hostilities intensified across the Arabian Peninsula as Houthi forces in Yemen fired salvoes of ballistic missiles & armed drones into Saudi Arabia, injuring at least 73 people. The strikes targeted key strategic infrastructure, forcing the temporary closure of several energy facilities across the country. Saudi Arabia responded by launching heavy retaliatory air raids on military facilities & command centres in western Yemen. Casualties in the Yemeni conflict have surged significantly over the past 24 hours, marking the most severe outbreak of direct combat between the combatants in over four years. The sharp military escalation threatens to completely dissolve existing diplomatic ceasefires.
• US & Canada Trade War Worsens. Trade relations deteriorated further between the US & Canada after Washington announced new import bans on Canadian alcohol, dairy products, & motorcycles. The restrictive measures mark a significant decline in bilateral economic policy & trigger immediate domestic friction between the neighbouring trading partners. Ottawa condemned the unilateral action, indicating that retaliatory tariff countermeasures are actively under consideration to protect domestic industries. Concurrently, EU officials held bilateral discussions with Canadian representatives to strengthen an independent trade & defence alliance, explicitly aimed at insulating both economies from shifts in American tariff policies & growing Chinese economic influence.
• US Monetary policy debate escalated ahead of upcoming consumer price data. Fed officials signalled growing concern over rising energy costs driven by global maritime disruptions, which threaten to reverse recent progress on core inflation. Economic analysts expect headline monthly inflation to accelerate, complicating upcoming decisions regarding interest rate cuts. Despite persistent geopolitical headwinds, underlying core measures are projected to show moderate cooling year-on-year. Bond market volatility has expanded globally as institutional investors recalibrate expectations for central bank easing cycles in light of persistent commodity supply shocks. BofE Governor Andrew Bailey also spoke yesterday highlighting his concerns for energy related inflationary pressures.
• Northern Europe defence coordination expanded as Sweden & neighbouring NATO members executed joint military manoeuvres designed to enhance Arctic defence capabilities. The alliance focused on protecting regional underwater communications cables & strategic maritime supply routes from potential interference. Simultaneously, EU leadership held high-level economic discussions with Greenland aimed at securing direct long-term investments in critical mineral extraction & polar infrastructure development. These strategic initiatives reflect Europe’s focused efforts to strengthen resource security & build operational resilience across northern maritime borders amidst ongoing geopolitical friction.

Markets

• US Equity closed lower yesterday, returning from the Monday holiday, driven down by rising geopolitical anxieties & climbing oil prices that weighed heavily on investor appetite. The Dow fell -628 points or -1.18% to 52,786, leading losses among the major indices, while the S&P dropped -45 points or -0.58% to 7,673. The Nasdaq showed relative resilience but still ended in negative territory, slipping -86 points or -0.32% to finish at 26,421. Market sentiment remained distinctly cautious as institutional capital rotated out of broad cyclical equities & shifted toward defensive assets amidst growing supply chain & inflation concerns.
• Asian Equity bourses are displaying mixed performance across the region today as market participants weigh regional tech strength against persistent global energy risks. The Nikkei is trading virtually flat, up 20 points or 0.03% at 65,289, while the Hang Seng is flat, down -0 points or -0.00% at 25,317, reflecting cautious sentiment in Chinese equity markets. Conversely, the Kospi is outperforming its regional peers, surging 111 points or 1.59% to 7,065, propelled by robust demand for semiconductor exporters & broad-based buying across the tech sector.
• European & UK Equity markets are facing a soft open ahead of today's trading session, as indicated by early index futures pricing. FTSE Futures are down -0.47%, reflecting downward pressure from global market softness, while the Dax Futures are tracking lower by -0.52%. Bucking the broader negative trend, the CAC 40 Futures are posting modest gains, up 0.13%. Sentiment across European trading floors remains constrained as market participants digest higher energy costs & await clearer direction from upcoming macroeconomic data releases.
• UK & Eurozone Bond Markets. Fixed income markets face a cautious trading session as elevated crude prices reignite medium-term inflationary pressures across Europe. In the Eurozone, 10yr Bund yields stand at 3.365%, with market participants closely analysing ECB policy guidance regarding rate trajectories in light of imported energy inflation. The persistent gap between economic growth expectations & persistent price pressures continues to keep European sovereign debt yields range bound. UK fixed income markets enter the session with 10yr Gilt yields elevated at 5.168%. The significant yield premium reflects ongoing domestic fiscal considerations & persistent service-sector wage pressure, which complicates the BofE monetary easing timeline. Institutional traders will focus on upcoming debt issuances & central bank commentary for indications of yield curve direction.
• Currency Snapshot: 
  • Sterling trades at 1.355 against the US Dollar & 0.858 against the Euro. Cable continues to find underlying support from elevated 10yr Gilt yields, which preserve a favourable interest rate differential for the currency. However, persistent domestic economic headwinds & energy-driven inflation risks remain a drag on broader performance against global currency pairs.
  • Euro stands at 1.1633 against the US Dollar, 0.858 against Sterling, & 0.941 against the Swiss Franc. The single currency faces headwinds from renewed trade friction between North American partners & European exposure to global energy price spikes. Monetary policy divergence between the ECB & Fed continues to dictate broader trading ranges for the currency.
  • Swiss Franc maintains its status as a premier safe-haven asset, trading at 0.809 against the US Dollar & 0.941 against the Euro. Geopolitical turmoil in the Middle East & volatile equity markets continue to drive capital flows into Swiss assets. Traders remain watchful for potential Swiss National Bank interventions aimed at curbing excessive currency strength.

Economic Data (Western European Today)

Govt Bond Auctions (Western European Today)

Holidays

• There are no public or national holidays scheduled across the UK, & the Eurozone for the remainder of this week. The next major public holidays are:
  • Germany - 3rd October (German Unity Day)
  • USA - 12th October (Columbus Day / Indigenous Peoples' Day).
  • Spain - 12th October (National Day of Spain)
  • Eurozone - 1st November (All Saints Day)

Pending Deals & Mandates 

Euro (€)

• 4th September: Pilgrim’s Pride Corporation (exp. Issue ratings of BBB- /BBB- by S&P & Fitch), one of the world's leading providers of poultry, retail-ready, & prepared foods, including well-recognised brands & value-added premium products, has mandated BBVA, BMO Capital Markets, Citigroup, ING, Mizuho, Rabobank, RBC Capital Markets & TD Securities as Active Joint Bookrunners to arrange a series of in-person & virtual fixed income meetings commencing on Monday, 7th September & Tuesday, 8th September. ING will be coordinating logistics. A Reg S/144A €500m (wng), Long 7-year senior unsecured bond offering due 2034 issued by co-issuers Pilgrim’s Pride Corporation & Pilgrim’s Europe Finance plc may follow, subject to market conditions. The net proceeds are intended to be used for general corporate purposes, including to fund the consideration in connection with the recently announced acquisition of Walkers Deli & Sausage Company & to pay related costs & expenses.
• 7th September: Uber Technologies, Inc.  (rated Baa1 / BBB+ / A- by Moody’s, S&P, & Fitch), mandated Goldman Sachs & Co. LLC, BNP Paribas, BofA Securities, Deutsche Bank, & Morgan Stanley as Joint Book-Running Managers to arrange a series of fixed income investor calls on Monday, September 7th & Tuesday 8th. An SEC registered, senior unsecured, € benchmark offering of 3yr, 6yr, 8yr, 12yr & 20yr fixed rate notes is expected to follow, subject to market conditions.
• 7th September: Parker-Hannifin Corporation (rated A3 / BBB+ / A- by Moody’s, S&P, & Fitch), mandated Barclays, Citigroup, & Morgan Stanley to act as Joint Book-Running Managers on a potential € benchmark bond offering. A SEC-registered, multi-tranche senior unsecured notes offering issued across 3.5yr, 5.5yr & 9.5yr tenors is expected to follow as early as tomorrow, subject to market conditions.

• 8th September: Capital One Financial Corporation (exp. Issue ratings of Baa1 / BBB / A- by Moody’s, S&P, & Fitch), has asked Barclays, Deutsche Bank, Goldman Sachs & Co. LLC & Morgan Stanley, to arrange a series of fixed income investor calls for today, Tuesday, September 8th. A benchmark-sized offering of SEC-registered 6NC5 & 11NC10 € denominated senior unsecured notes may follow, subject to market conditions.
• 8th September: Kutxabank (exp. Issue ratings of Aaa / AAA by Moody’s & DBRS), has mandated BBVA, Commerzbank, HSBC Continental Europe, J.P. Morgan, Kutxabank Investment & Natixis as joint lead managers to lead manage its forthcoming € benchmark 7yr, RegS Dematerialised book-entry form (anotaciones en cuenta), hard-bullet Cédulas Hipotecarias / Mortgage Covered Bonds (European Covered Bond Premium) offering. The deal is expected to be ECB eligible, LCR Level 1, beneficial treatment under CRR Art.129 and Solvency II and is ECBC Covered Bond Label Compliant. The transaction will be launched and priced in the near future subject to market conditions. The issuer is available for 1-on-1 calls upon request.

• 8th September: Agence Francaise de Developpement (rated A+ / A+ by S&P & Fitch), has mandated Barclays, BNP Paribas, Citi, J.P. Morgan, Morgan Stanley & Natixis as Joint Lead Managers for its upcoming Reg S Bearer Dematerialised short 8yr € benchmark due 25 May 2034. The issue will be launched in the near future subject to market conditions.
• 8th September: The Free and Hanseatic City of Hamburg (rated AAA by Fitch), mandated BayernLB, Commerzbank, Helaba, ING & JP Morgan to lead manage its upcoming 6yr € benchmark fixed rate Landesschatzanweisung. Launch & pricing is expected in the near future, subject to market conditions.

Sterling (£)

• 8th September: Amazon.com (rated A1 / AA / AA- by Moody’s, S&P, & Fitch), mandated JP Morgan, Barclays, HSBC, & NatWest to act as Joint Book-Running Managers on a potential Sterling-denominated bond offering. An inaugural SEC-registered 3yr, 6yr, 12yr, & 19yr multi-tranche fixed-rate senior unsecured benchmark transaction may follow as early as tomorrow, subject to market conditions.

Recent Supply

Key Market Data