• The EU’s dual-tranche is likely to dominate supply today - details below.
• Mixed communications from Trump & turmoil in the Middle East all point to a ‘risk-off’ sentiment, yet European primary markets continue to demonstrate resilience, with credit quality favoured.
• Yesterday's AusNet & Danfoss corporate trades (both BBB credits) drew solid order books oversubscribed 3.55 X & 6 X respectively.
• OAT’s continued to sell-off yesterday with the 10yr only 10bps shy of 5.0%
• The IMF & World Bank meetings continue in Bangkok & run all week.
• € IG delivered €2.77bn from 6 deals (2 x Corp, 2 x FIG & 2 x SSA) via 6 tranches.
• Sterling (£) priced £300m from 1 deal (1 x FIG) via 1 tranche.
  • Standard Life’s Tier 2 was 6 X oversubscribed.
• There was no supply in either the Swiss Franc or US$ Reg S markets.
• Brent Crude is trading above the month average, though off yesterday’s highs the breached $107, currently trading at c.$105.66 (c.$104.05 this point yesterday). 
• The VIX widened slightly, set to open at 15.21 (14.84 this point yesterday).
• iTraxx Europe & iTraxx Senior & Sub financial indices ended Monday wider, set to open at 63.327 (+0.61%), 71.326 (+1.02%) & 119.438 (+1.75%) respectively (% △ on yesterday).
• Pipeline:  The European IG pipeline is as follows. 
  • 1 x € FIG (1 x Covered)
  • 2 x € SSA (1 x Digital Native Security & 1 x EU dual-tranche)
    • The European Union: 15yr & TAP of Oct 33. Expect a combined €9 to €12bn.

Contact Stuart Aylward with questions or comments on Bloomberg or via stuart@creditflowresearch.com

Key € IG Supply Stats for yesterday

• Corporate
  • Total IG: €1.12bn
  • Avg. tranche size €560m
  • Avg. IPT to Pricing -33.75
  • Avg. cover 4.77 x  
• FIG
  • Total IG: €950m
  • Avg. tranche size €475m
  • Avg. IPT to Pricing -5 (covered) €750m
  • Avg. IPT to Pricing 0 (unsecured) €200m
  • Avg. cover 2.13 x 
• SSA
  • Total IG: €700m
  • Avg. tranche size €350m
  • Avg. IPT to Pricing -1.5
  • Avg. cover 1.93 x

Geo-Political News

• Kyiv Power Infrastructure Targeted By Russia Despite Clais of ‘Energy Ceasefire’ Kyiv has reported Russian strikes on six vital energy infrastructure facilities, severely damaging power networks despite recent claims by President Trump that an ‘energy ceasefire’ was in place. Moscow appears to have an opposite directive & little interest in maintaining such a pact, demonstrating a clear determination to hit energy targets across Ukraine as winter approaches. Ukrainian President Volodymyr Zelenskyy confirmed that these relentless Russian attacks show Moscow is actively ignoring the proposed truce. Ukrainian officials warned that continued destruction of electrical grids will force retaliation against Russian energy sites if the aggression persists. Geopolitically, the destruction complicates international efforts to secure seasonal humanitarian pauses, ensuring that the broader regional energy supply remains highly volatile while European allies brace for escalating winter instability.  
• IMF Upgrades UK Growth Outlook The International Monetary Fund has upgraded its UK economic growth forecast for 2026 to 1.3%, raising it from previous estimates of 1.0%. Speaking at the IMF summit in Bangkok, the Chief Economist at the IMF (Silvana Tenreyro) cited broader economic resilience across major industrialised economies. However, the IMF warned that persistent long-term borrowing costs & lingering energy price pressures could moderate expansion down to 1.2% by 2027. Despite these structural headwinds, the upward revision provides welcome relief for UK policymakers navigating fiscal constraints. A timely statement ahead of UK Chancellor John Healey’s budget on the 28^thof this month. The IMF report highlights that near-term consumption remains supported by steady domestic activity. Nevertheless, global market participants continue to monitor whether elevated sovereign debt yields will constrain future fiscal manoeuvrability across European economies.
•  Western Powers Broaden Russian Sanctions Western governments announced an expansive wave of financial sanctions targeting over 1,500 entities connected to Russia's military-industrial supply chain. The coordinated measure aims to restrict Moscow's access to foreign microelectronics, dual-use technology, & international financial clearing channels. Officials stated that the restrictions specifically target shadow fleet shipping operations facilitating illicit oil exports. The economic manoeuvre represents the largest single expansion of punitive trade measures since the conflict began.   
• Beijing Initiates Taiwan Live-Fire Drills Beijing has announced new live-fire military exercises along its southeastern coastline, directly escalating maritime friction across the Taiwan Strait. The drills follow recent diplomatic friction after China imposed targeted sanctions against government officials from Belize & Paraguay over their continued formal ties with Taiwan. Officials in Washington condemned the punitive measures, accusing Beijing of coercive tactics against sovereign nations. Naval forces in the region remain on heightened alert as Chinese military assets deploy near vital shipping lanes. The sudden escalation underscores persistent cross-strait military risks, creating renewed supply chain anxieties for international technology manufacturers heavily reliant on regional maritime freight routes.   
• Iran Proxy Strikes Target Saudi Arabia Iran-backed Houthi rebels launched a further series of ballistic missile & drone strikes into Saudi Arabia, as the international airport in Riyadh remained closed after the heavy strikes over the weekend. The attacks triggered widespread air defence interceptions while prompting international security warnings regarding regional airspace safety. In response, Coalition forces launched retaliatory airstrikes against launching sites in Yemen. The escalation highlights expanding regional proxy confrontations involving Tehran, raising immediate security concerns for critical energy infrastructure & commercial shipping corridors. Foreign governments have issued updated travel advisories, urging extreme caution as military activity intensifies across the Arabian Peninsula.
• Middle East Aviation Security Escalates Civil aviation authorities across several Middle Eastern nations issued urgent route restrictions following widespread regional missile engagements. Commercial airlines suspended dozens of international flights after military defence systems engaged incoming air threats over key transit corridors. The operational disruptions forced global carriers to reroute intercontinental flights, causing significant logistical delays & increasing operational fuel costs. Defence officials across the region reported heightened defence readiness to safeguard critical transport hubs. The sudden flight cancellations underscore how rapid geopolitical escalations can directly impair global transportation networks & regional economic stability.
• Strait of Hormuz Vessel Intercepted Iranian Islamic Revolutionary Guard Corps forces intercepted & struck a commercial vessel navigating near the Strait of Hormuz, citing alleged maritime violations. The incident adds yet further fuel to fire amid escalating tensions in the region. Foreign ministers from several nations called for the immediate cessation of hostile actions against merchant vessels, warning that interference with international navigation threatens global energy security.

Markets

• US Equity While yesterday was a US Federal holiday, the stock exchanges were open, however, the bond markets were closed. The Dow gained 196 points to close at 51,851 (+0.38%), supported by steady industrial performance. Conversely, broader risk sentiment wavered as selloffs hit tech stocks, pulling the S&P down 4 points to 7,807 (-0.06%). The Nasdaq bore the brunt of the downside, dropping 120 points to finish at 27,246 (-0.44%) due to rotation out of mega-cap tech holdings. Investors adjusted exposure following mixed quarterly earnings reports & shifting interest rate expectations, leading to divergent sector performance across major equity indices.
• Asian Equity bourses are trading lower amid severe regional risk aversion. The Nikkei trades down 1,515 points at 67,516 (-2.20%), dragged lower by heavy selling in tech exporters. The Hang Seng trades down 95 points at 24,176 (-0.39%) as property sector weakness offsets regional gains. Meanwhile, the Kospi trades down 323 points at 6,060 (-5.06%), experiencing significant selling pressure across semiconductor manufacturing shares. Broader equity sentiment remains subdued across the region.
• European & UK Equity futures indicate a split opening across major exchanges ahead of the cash open. FTSE futures trade up +0.20%, supported by steady commodity producer performance. Conversely, DAX futures trade down -0.12%, reflecting ongoing drag in industrial manufacturing valuations. CAC 40 futures trade up +0.37%, lifted by gains across luxury & defensive consumer sectors. Price action across European index derivatives strictly reflects individual stock movements & corporate earnings revisions rather than broader macro shifts.
• UK & Eurozone Bond Markets Gilt & Bund yields reflect distinct sovereign risk positioning ahead of today's session. 10yr Gilt yields trade at 5.439%, supported by market recalibration following upgraded domestic growth forecasts. Meanwhile, 10yr Bund yields stand at 3.475%, as fixed income investors weigh broader Eurozone fiscal conditions against shifting inflation expectations. Sovereign bond yield spreads across European fixed income markets reflect ongoing adjustment to long-term interest rate trajectory expectations.
• Currency Snapshot:
  • Sterling trades at 1.321 against the US dollar (+0.18%), bolstered by upgraded economic growth projections. Against the euro, GBP stands firm with EUR/GBP trading at 0.845 (-0.12%), reflecting relative economic momentum across the UK.
  • Euro trades at 1.117 against the US dollar (-0.15%), weighed down by sluggish industrial indicators across continental Europe. European cross-currency flows show moderate consolidation across foreign exchange trading desks.
  • Swiss Franc trades at 0.833 against the US dollar (+0.22%), benefiting from safe-haven capital inflows. Meanwhile, EUR/CHF trades at 0.931 (-0.08%), maintaining steady positioning within recent foreign exchange boundaries.

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 holidays scheduled are as follows.
  • Eurozone - 1st November (All Saints Day) - Sunday
  • USA - 11th November (Veterans Day)

Pending Deals & Mandates

Euro (€)

• 21st September: Fairstone Bank of Canada (exp. Issue ratings of Aa1 / AA by Moody’s & DBRS), mandated RBC Capital Markets as Arranger & Sole Structuring Advisor, & BMO Capital Markets, DZ Bank, LBBW, Natixis & RBC Capital Markets as Joint Active Bookrunners for an inaugural 3yr € benchmark soft-bullet Covered Bond. The Covered Bonds are backed by Canadian residential mortgages. This is the borrower's debut covered bond. The investor roadshow concluded with consensus feedback in range fair value flat/small bps inaugural premium to EQB. c.50 investors involved through the marketing process. An inaugural 3yr Covered Bond may follow as early as this week.

• 7th October: The Grand Duchy of Luxembourg (rated Aaa / AAA / AAA by Moody’s, S&P & Fitch), mandated Barclays, BCEE, BGL BNP Paribas, Citi & Credit Agricole CIB as Joint Lead Managers to arrange a series of virtual fixed-income investor calls in relation to its upcoming Inaugural 10yr, € benchmark fixed rate Digitally Native Securities. The Digitally Native Securities will be issued on a distributed ledger technology (DLT) platform operated by LuxCSD S.A. (D7 DLT Platform). The Digitally Native Securities are also eligible for clearance & settlement though Clearstream Banking & Euroclear Bank SA/NV. The transaction is expected to be launched & priced in the near future, subject to market conditions. RegS Bearer, CAC, FCA/ICMA stabilisation.
  • A digitally native securities is a bond, issued, & managed directly on a blockchain or distributed ledger from inception, rather than existing first as a physical certificate & then tokenized latterly. By incorporating smart contracts into their core design, such bonds automate dividend distributions, compliance checks, & settlement, offering near-instant clearing, enhanced transparency, & continuous 24/7 trading without relying on legacy clearinghouses or paper registries.
• 12th October: The European Union (rated Aaa / AA+ / AAA / AAA by Moody's, S&P, Fitch & Scope) mandated BofA Securities, Goldman Sachs Bank Europe SE (DM/B&D), LBBW, Morgan Stanley & Santander as Joint Lead Managers for its upcoming € benchmark, Fixed Rate RegS Bearer dual tranche transaction, comprising a TAP of the EU 3.125% benchmark October 2033 (EU000A4EUY43) & a new 15yr benchmark due 12th of December 2041. No further group. The transaction will be launched in the near future, subject to market conditions.

Recent Supply

Key Market Data