• As European equity & bond markets sold off heavily yesterday, the primary IG markets in Europe stayed open & delivered another bumper session of supply with several significant multi-tranche corporate deals.
• € IG priced €15.275bn from 9 deals (4 x Corp, 3 x FIG & 2 x SSA), via 17 tranches.
  • WTD: €42.625bn exceeding the week's €40.9bn forecast by €2.475bn.
• Sterling (£) saw £4.25bn, from 1 deal (1 x Corp) via 4 tranches.
• Swiss Franc priced Chf550m from 2 issuers (1 x Corp & 1 x FIG) via 3 tranches.
• US$ Reg S saw zero trades. 
• The European pipeline cleared out yesterday with activity expected to be extremely light today given both recent market volatility & today’s ECB announcement.
• US CPI data tomorrow will be closely watched.
• Focus remains on the ECB’s rate decision today (25bp hike expected) - 1:15pm BST.
• Brent Crude is currently trading at c.$100.6; (this time yesterday c.$98.86).
• The VIX rose again, currently at 16.46; up from this point yesterday (15.72).
• iTraxx Europe & iTraxx Senior & Sub financial indices are all higher than this point yesterday, sitting at 52.465 (+1.79%), 54.811 (+1.91%) & 86.701 (+1.59%) respectively.
• Pipeline: There are currently no mandated deals pending in the European IG pipeline.

Questions & Comments to stuart@creditflowresearch.com

Key € IG Supply Stats from yesterday

• Corporate
  • Total IG: €9.025bn
  • Avg. tranche size €820m
  • Avg. IPT to Pricing -29.77
  • Avg. cover X 2.24 (no books for Uber & PH)
• FIG
  • Total IG: €3.75bn
  • Avg. tranche size €938m
  • Avg. IPT to Pricing -6 (covered) - €750m
  • Avg. IPT to Pricing -27.17 (unsecured) - €3bn
  • Avg. cover X 2.23
• SSA
  • Total IG: €2.5bn
  • Avg. tranche size €1.25bn
  • Avg. IPT to Pricing -1
  • Avg. cover X 1.81

Geo-Political News

• Brent Crude surpasses $100 per barrel in response to military engagements between Iran & the US escalating with no sign of a resolution in sight. Oil prices remain elevated following Iranian declarations of intent to intensify the conflict & expand retaliatory strikes against commercial & US military assets in the region. Washington launched targeted strikes that destroyed five Iranian crude oil tankers in response to repeated missile attacks directed at US naval vessels in regional waters. Tehran responded by firing salvoes of ballistic missiles at military installations in Jordan & launching strikes against commercial vessels attempting to navigate the Strait of Hormuz. Energy markets remain extremely volatile, with extended disruption to Gulf shipping driving broader global inflationary concerns & sending energy benchmarks higher across European markets.
• US Treasury debt buyback efforts failed to stem a sharp sell-off in sovereign debt markets after Treasury Secretary Scott Bessent announced an intervention strategy. The administration committed $6 billion toward purchasing back government debt in an attempt to stabilise benchmark yields, which recently spiked to multi-year highs. Financial market participants largely dismissed the intervention as insufficient relative to the scale of current fiscal demands & rising inflation expectations. Yields across the US curve continued their upward trajectory as bond traders demanded higher risk premia amid persistent geopolitical instability & elevated energy prices. The muted reception to the intervention underscores market scepticism surrounding the administration's current fiscal trajectory, with institutional market participants expressing doubt that such isolated debt repurchases can counteract broader structural supply pressures & persistent fiscal deficits.
• Trump’s $5k pledge to US citizens at Republican rally in Texas President Trump offered a $5,000 direct payout to every adult US citizen contingent on the Republican Party retaining control of Congress in the upcoming midterm elections. The pledge carries an estimated total cost of approximately $1.3 trillion, yet the administration provided no structural detail regarding how the fiscal expenditure would be funded. Market analysts highlighted that such an expansive capital disbursement would significantly widen the federal budget deficit while adding further pressure to sovereign debt issuance & domestic inflation dynamics. Institutional investors expressed immediate concern regarding the long-term sustainability of sovereign balance sheets should such expansive fiscal promises be codified into law following the upcoming electoral cycle, warning that secondary market yields would absorb severe repricing shocks. Additionally, whether the offer constituted a ‘bribe’ is being debated.
• UK-Israel diplomatic relations deteriorated following coordinated measures by European nations targeting trade originating from West Bank settlements. The UK joined eleven other European governments & Canada in confirming intent to impose trade restrictions on goods produced within illegal settlements. On Tuesday Israel retaliated by ordering the closure of the British consulate in East Jerusalem, which serves as a diplomatic liaison to Palestinian authorities. The diplomatic breach marks an escalation in European pressure over Israeli territorial policies amid ongoing regional instability. International observers note that deteriorating diplomatic channels could complicate broader peacekeeping initiatives & bilateral security agreements across the region.
• Ukrainian drone strikes damage Russian naval infrastructure, targeting the Black Sea port facility at Novorossiysk. Ukrainian forces confirmed hits on naval vessels & logistics infrastructure, causing temporary operational halts at the nearby Caspian Pipeline Consortium export terminal. Russian authorities reported localised civilian casualties & infrastructure damage while escalating retaliatory air strikes against Ukrainian energy grids & southern port installations in Mykolaiv. Western intelligence agencies warned that prolonged conflict dynamics could extend active hostilities through 2027 as diplomatic peace initiatives remain stalled, creating prolonged friction across global agricultural & energy supply chains.
• European diplomatic expulsions highlighted rising tensions with Moscow as Hungary expelled 10 Russian diplomats, citing activities incompatible with their official status. The unexpected measure from Budapest underscores growing concern among European governments regarding covert intelligence operations, cyber warfare, & energy infrastructure sabotage directed by Moscow. Concurrently, European security agencies issued warnings regarding potential targeted disruptions to critical infrastructure as winter approaches. This rare diplomatic break by Hungary reflects a broader consolidation of NATO security policy in response to persistent threats against European sovereign infrastructure, signalling a decisive shift in regional diplomatic postures & cross-border intelligence coordination across central European states.

Markets

• US Equity markets closed lower across the board as persistent geopolitical tensions & elevated oil prices weighed on investor sentiment. The Dow fell 405 points, or 0.77%, to finish at 52,381, led down by industrials & consumer discretionary components. The S&P dropped 37 points, down 0.48% to 7,636, while the Nasdaq slipped 168 points, or 0.64%, to 26,253. Risk appetite remained subdued as rising Treasury yields & energy supply disruptions dampened demand for high-growth tech valuation multiples.
• Asian Equity bourses are mixed to lower this morning, tracking overnight losses on Wall Street & digesting persistent energy supply disruptions. The Nikkei is weaker by 257 points, down 0.40% to 64,885, as energy import costs pressured domestic manufacturing sentiment despite solid exporter earnings. The Hang Seng is suffering heavier losses, falling 324 points, or 1.28%, to 24,950, dragged down by regional tech & property counters. The Kospi has just turned green up 15 points, or 0.22% to 7,066.
• European & UK Equity futures signal a fragmented opening across major exchanges. FTSE futures indicate a subdued start, down 0.07%, as heavy energy weightings help offset broader equity weakness. Dax futures point to modest gains, trading up 0.18%, buoyed by selective industrial resilience. Conversely, CAC 40 futures point to a sharp drop of 1.98%, heavily burdened by broad weakness in luxury exports & financial services following renewed geopolitical risks.
• UK & Eurozone Bond Markets across Europe face significant forward-looking catalyst volatility today ahead of the ECB monetary policy announcement, where markets have fully priced in a 25bp rate hike to 2.50%. European debt yields remain under persistent upward pressure, with the 10yr Bund yield at 3.442% & the 10yr Gilt yield at 5.258% (9bps higher than yesterday), driven by mounting geopolitical oil shocks & accelerating headline inflation figures. Beyond the imminent rate decision, bond traders will also be paying attention to the US PPI data today, but more closely to the US CPI data out tomorrow.
• Currency Snapshot: 
  • Sterling spot price action trades at 1.355 against the US dollar, maintaining institutional support as elevated 10yr Gilt yields at 5.258% reinforce rate differential cushions, while cross-rate flows against the Euro hold at 0.859 as markets evaluate relative central bank tightening cycles between the BofE & ECB.
  • Euro valuations remain heavily anchored around 1.164 against the US dollar ahead of today's ECB rate verdict, where an anticipated 25bp hike is counterbalanced by stagflationary growth risks stemming from regional energy shocks, while trading at 0.942 against the Swiss Franc as cross-currency flows signal persistent defence against regional volatility.
  • Swiss Franc trading dynamics reflect sustained safe-haven demand across global foreign exchange desks, holding the US dollar down at 0.809 against the Swiss Franc, driven by ongoing Middle Eastern military escalation & capital flight out of higher-beta cyclical currencies into traditional European defensive liquidity reserves.

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 

• None.

Recent Supply

Key Market Data