• ECB Governing Council Member (Pierre Wunsch) signaled further potential rate hikes (see below).
• The EU did not disappoint with a combined €160bn book for its €10bn dual-tranche (see below).
• Bank Earnings in the US: Yesterday, JPMorgan, Goldmans, Citigroup, & Wells Fargo reported Q3 earnings, yielding a mixed reception. GS & Citi outperformed on robust equity trading & investment banking, whereas JPM missed revenue forecasts due to fixed-income trading headwinds & Wells Fargo delivered a thin beat.
  • Bank of America & Morgan Stanley report today before the US open.
• Going into today the European IG Pipeline is composed entirely of SSA candidates, all of which are expected to come today.
• Sweden’s FSA (Finansinspektionen) has imposed a temporary additional capital requirement on SEB this morning due to identified internal risk model deficiencies.
• The IMF & World Bank meetings continue in Bangkok & run all week.
• € IG priced €11.5bn from 4 deals (3 x FIG & 1 x SSA) via 5 tranches.
  • €14.27bn WTD - 56% of our ‘Supply Survey’ Forecast of €25.5bn.
  • Zero Corporate supply yesterday, with ‘blackout’ periods contributing to thin supply.
• Swiss Franc delivered Chf110m from 1 deal (1x FIG) via 1 tranche.
• Zero supply in both the Sterling (£) & US$ Reg S markets.
• Brent Crude is trading up once more, currently trading at c.$106.23 (c.$105.66 this point yesterday). 
• The VIX is set to open slightly wider at 15.27 (15.21 this point yesterday).
• iTraxx Europe & iTraxx Senior & Sub financial indices ended slightly wider again, set to open at 63.521 (+0.31%), 71.475 (+0.21%) & 119.731 (+0.25%) respectively (% △ on yesterday).
• Pipeline:  The European IG pipeline is as follows. 
  • 4 x € SSA (1 x Social, 1 x Digital Native Security, 1 x EARN & 1 x Sust)

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

Key € IG Supply Stats for yesterday

• Corporate
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing 
  • Avg. cover 
• FIG
  • Total IG: €1.5bn
  • Avg. tranche size €500m
  • Avg. IPT to Pricing -5 (covered) €500m
  • Avg. IPT to Pricing -27.5 (unsecured) €1bn
  • Avg. cover 3.6 X
• SSA
  • Total IG: €10bn
  • Avg. tranche size €5bn
  • Avg. IPT to Pricing -2.5
  • Avg. cover 16 X

Geo-Political News

• Ukrainian Infrastructure Target of Massive Russian Strikes Heavy Russian bombardment targeted Ukrainian civilian infrastructure overnight, coinciding with Ukrainian President Volodymyr Zelensky’s visit to London today for high-level meetings at Downing Street. The renewed air raids severely damaged energy grids across multiple provinces, leaving tens of thousands without electricity as winter approaches. Ukrainian defensive networks intercepted numerous long-range projectiles, yet several critical utility installations sustained direct hits. The escalation underscores acute geopolitical friction as Zelensky prepares to press UK Prime Minister Andy Burnham for expanded military aid & permissions to utilize long-range weaponry deeper within sovereign Russian territory. Strategic analysts emphasize that the immediate timing of the offensive aims to diminish Ukrainian negotiating leverage ahead of bilateral consultations in London.
• Houthi Missile Strike Hits Saudi Aramco Headquarters Yemen-based Houthi forces launched a targeted missile strike on Saudi Aramco’s administrative headquarters in Dhahran at 4:15am London time this morning. The impact ignited localized fires across the facility's outer perimeter, though emergency crews suppressed the blazes without casualties. Saudi Arabian defence assets intercepted secondary projectiles aimed at nearby petrochemical plants. The escalation directly threatens Arabian Peninsula energy security & sparked immediate volatility across global crude markets. Houthi military spokespersons claimed full responsibility, asserting the operation responded to ongoing regional maritime blockades. The Saudi Ministry of Energy confirmed core production & export operations remain unaffected, yet security protocols across eastern industrial zones have elevated to maximum readiness. International diplomatic leaders strongly condemned the direct assault on commercial infrastructure, warning that unprovoked strikes risk broader military contagion across the Middle East.   
• ECB Governing Council Member Signals Potential Rate Hikes Ahead Speaking at the IMF meetings in Bangkok, Pierre Wunsch (National Bank of Belgium Governor and ECB Governing Council member) stated that the ECB "is probably going to have to hike again", though he cautioned he wasn't making explicit bets due to high uncertainty around energy markets. Markets will likely fear further monetary tightening could suppress already sluggish industrial output across core member economies. The ECB has continuously emphasized that future rate decisions will depend strictly on incoming economic data, reaffirming that the Governing Council will not hesitate to adjust policy tools if medium-term inflation risks escalate.  
• IMF Issues Urgent Warning on Sovereign G7 Debt The International Monetary Fund issued a stark warning regarding unsustainable sovereign debt levels across G7 nations, urging immediate fiscal interventions. IMF leadership emphasized that member states cannot simply rely on economic growth to inflate away record debt burdens, demanding proactive deficit reduction measures to avert structural instability. The report noted that soaring debt-servicing costs severely restrict governments' capacity to manage unexpected macroeconomic shocks or invest in capital infrastructure. Interestingly, the assessment highlighted that the UK maintains a relatively stronger fiscal trajectory than most G7 peers, owing to recent expenditure adjustments & revenue reform initiatives. Nevertheless, the IMF stressed that global public debt expansion threatens global financial stability unless structural spending constraints are implemented swiftly. 
• US China Tech Trade Friction Intensifies Dramatically Bilateral friction escalated significantly after Washington imposed stringent foreign direct investment restrictions targeting Chinese high-performance semiconductor, quantum computing, & AI sectors. The White House justified the expanded embargo under national security directives, aiming to curb advanced technological transfers to foreign defence enterprises. Beijing’s Commerce Ministry immediately criticized the unilateral measures, promising targeted retaliation against American commercial interests operating within mainland supply chains. Asian market sentiment softened as tech equity valuations adjusted to anticipated revenue losses from export constraints. Supply chain operators warn that fragmented trade regulations will exacerbate manufacturing bottlenecks & elevate compliance overhead across global hardware manufacturing networks.
• Red Sea & Bab El-Mandeb Maritime Security Threats Escalate Naval defence agencies reported increased asymmetrical attacks on commercial shipping vessels navigating the Red Sea & Bab el-Mandeb Strait, forcing international maritime logistics operators to divert container traffic around the Cape of Good Hope. The long-distance maritime rerouting adds up to 14 transit days between European ports & East Asian trading hubs, driving spot container freight rates sharply upward across global shipping exchanges. Prolonged structural disruptions across these critical chokepoints risk embedding sticky headline inflation.

Markets

• US Equity bourses finished lower as persistent inflation concerns & rising Treasury yields weighed on broader market risk appetite. Tech equity underperformance anchored major benchmarks, offsetting moderate gains in defensive utility sectors. Investors digested mixed corporate earnings commentary alongside elevated geopolitical uncertainty, dampening capital deployment across growth assets. The Dow declined -0.35% to 51,670, while the S&P lost -0.02% to trade at 7,805. The Nasdaq recorded the session's steepest decline, dropping -0.15% to 27,204, driven by broad selling in megacap semiconductor shares & software developers.
• Asian Equity bourses trade higher across the board as resilient corporate earnings & localized stimulus measures boost regional risk sentiment. Nikkei is up +0.77% to 68,300, propelled by strong export demand & semiconductor sector strength. The Kospi is outperforming regional peers, trading up +1.30% at 6,114 following robust global memory chip demand metrics. Hang Seng stands at 24,385 with a +0.16% advance, supported by gains in mainland property & tech shares. Regional equity traders continue directing capital into tech manufacturers, sustaining broad index momentum.
• European & UK Equity futures indicate a mixed open across major regional bourses. DAX futures trade up +0.40% at 24,680, supported by strength in industrial manufacturing & auto export contracts. FTSE futures show modest upward traction, trading +0.08% higher to 9,845 as resource extraction shares absorb stable commodity pricing. Conversely, CAC 40 futures trade down -0.03% to 8,120, weighed down by luxury goods sector weakness & dampening consumer sentiment. Overall price action remains tightly rangebound across broader European derivatives.
• UK & Eurozone Bond Markets UK Gilts & Eurozone sovereign bonds enter today's session navigating elevated yield environments driven by hawkish central bank rhetoric & persistent structural debt concerns. The 10yr Gilt yield stands at 5.446%, while the 10yr Bund yield sits at 3.465%. Fixed-income sentiment remains cautious as fixed-income investors adjust portfolios to account for prolonged restrictive monetary policy settings across Western economies. Sovereign curve postures reflect ongoing term premium expansion, with sovereign spreads between core & peripheral Eurozone debt expanding.
• Currency Snapshot:
  • Sterling trades firmly against major counter-currencies, supported by sticky inflation metrics & elevated Gilt yield support. GBP/USD trades up +0.18% at 1.327 as currency markets digest relative rate differentials.
  • Euro reflects mixed underlying sentiment following hawkish ECB rate commentary. EUR/USD trades +0.12% higher at 1.121, while EUR/GBP slides -0.06% to stand at 0.844.
  • Swiss Franc exhibits modest safe-haven demand amid heightened geopolitical risk. USD/CHF trades down -0.22% at 0.832, while EUR/CHF slips -0.10% to 0.932.

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 (€)

• 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 virtual roadshow concluded on Tuesday the 13th & the transaction is expected to launch on Wednesday the 14th of October, 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.
• 13th October: The African Development Bank (rated Aaa / AAA / AAA / AAA by Moody's, S&P, Fitch & Japan Credit Rating Agency), mandated Barclays, Deutsche Bank, HSBC & Natixis, to lead manage its new 5yr, Social, € benchmark (Global SEC exempt) to be launched & priced in the near future, subject to market conditions.
• 13th October: The European Investment Bank (rated Aaa / AAA / AAA / AAA by Moody's, S&P, Fitch & DBRS), mandated BNP Paribas, BofA Securities, Credit Agricole CIB & JP Morgan to lead manage a new €3bn (wng) 7yr EARN due 15th November 2033. The transaction (RegS, Registered, Cat1) will be launched in the near future, subject to market conditions.
• 13th October: The Flemish Community (rated AA- by Fitch), mandated Deutsche Bank as Sole ESG Coordinator & Deutsche Bank, HSBC, ING & UniCredit, as Joint Lead Managers for its upcoming € benchmark fixed rate dual tranche transaction, with a new short 5yr (maturing in August 2031) sustainable bond & a new short 12yr conventional bond with €500m (exp) (maturing in June 2038). The transaction is expected to be launched in the near future, subject to market conditions.

Recent Supply

Key Market Data