• Yesterday was a session of two halves
  • The morning was incredibly bearish with a pronounced sell off in European Govies & oil spiralling higher
  • The afternoon saw indices, oil & Govies retrace their earlier swings
• Primary continues to demonstrate resilience, however, pricing needs to reflect prevailing ‘risk-off’ tone
  • Unsecured NIC’s yesterday were in the 5 to 15bp range
• Orderbooks were under pressure yesterday & this is likely to continue into today if pricing is pushed.
  • Book multiples yesterday for FIG avg. only 2.1 X.
• Credit indices are wider & oil is holding close to 5 month highs.
• Bunds rallied yesterday with OAT’s remaining under pressure.
  • OAT vs Bund Differential at +153 (148 yesterday)
  • Bund, OAT & Gilt curves all flattened
• 38% of French IG corporate bonds are now trading tighter than their comparable French sovereign debt
  • French credit Orano SA issued yesterday & we have Pernod today - French credits mindful of Moody’s pending announcement on Friday regarding their Aa3 Sovereign debt rating on negative watch.
• UK CPI data for Sept out this morning.
  • Bank of England policymaker Megan Greene last night warned that energy-driven inflation risks are larger than anticipated & argued for higher interest rates.
  • Market still expecting rate hike by the BofE for 5th Nov
• Meta Q3 results today, potential multi-tranche € & US$ mandate tomorrow.
• € IG priced €5.2bn from 9 deals (3 x Corp, 5 x FIG & 1 x SSA) via 10 tranches.
  • €12.95bn WTD or 68.8% of our ‘Supply Survey’ forecast of €18.83bn.
  • FIG issuance dominated € IG supply yesterday (61.5% of vol. & 5 of 9 trades).
    • Covereds: Avg. books 2.08 X
    • UnSec: Avg. books very low at 1.43 X
  • Lowest book covers seen all year
    • RLB Noe-Wien 1.2 X => Books “at” not ‘above’ €600m
    • National Gas Transmission 1.28 X
    • Marsh & McLennan 1.33 X on both tranches
• Swiss Franc priced Chf170m from 1 deal (1 x Corp) via 1 tranche.
  • Re-opening of the non-domestic Corporate market (1st since 28th Sept).
• No activity in either the Sterling (£) or US$ Reg S markets.
• Brent Crude while off its highs yesterday morning is holding above $110, currently trading at c.$110.52 (c.$110.2 this time yesterday).
• The VIX pulled back from its highs yesterday, currently set to open at 17.31 (18.44 this time yesterday).
• iTraxx 5yr Europe & iTraxx Senior & Sub financial indices ended only marginally wider having ballooned out & are set to open at 65.221 (+0.49%), 73.277 (+0.9%) & 123.207 (+0.94%) respectively (% △ to this point yesterday).
• Pipeline:  The European IG pipeline is as follows. 
  • 2 x € Corp (1 x dual-tranche Hybrid)
  • 3 x € FIG (1 x Subordinated & 2 x Covered)
  • 2 x € SSA (1 x Inaugural Green Oct 23rd earliest & 1 x LSA)
  • 1 x £ FIG

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

Key € IG Supply Stats for Yesterday

• Corporate
  • Total IG: €1.5bn
  • Avg. tranche size €500m
  • Avg. IPT to Pricing -26.83
  • Avg. cover 2.47 X
• FIG
  • Total IG: €3.2bn
  • Avg. tranche size €533m
  • Avg. IPT to Pricing -5 (covered) €1bn
  • Avg. IPT to Pricing -21.13 (unsecured) €2.2bn
  • Avg. cover 1.64 X
• SSA
  • Total IG: €500m
  • Avg. tranche size €500m
  • Avg. IPT to Pricing -2
  • Avg. cover 7.3 X

Geo-Political News

• Strait of Hormuz Closure Escalates Iranian Foreign Minister Abbas Araghchi declared that the Strait of Hormuz will remain closed until the US accepts specific Iranian diplomatic conditions outlined under the Islamabad Memorandum of Understanding. Emphasising that the waterway resides within the territorial waters of Iran & Oman rather than international maritime space, Araghchi affirmed that vessel traffic will face continued disruption. Teheran rejected US economic sanctions & military threats, asserting that diplomatic negotiation remains the sole viable path forward. Meanwhile, Pakistani Field Marshal Asim Munir scheduled high-level talks in Teheran to mediate between Washington & Teheran as Iranian leadership prepares for potential defensive contingencies. Brent has continued to rise, sitting above $110 this morning.   
• US Withholds Ukraine Interceptor Missile Transfers Senior officials revealed that the Trump administration has stalled the approved transfer of critical air defence interceptor missiles requested by Kyiv to counter ongoing infrastructure strikes. The decision leaves Ukrainian defensive networks vulnerable as Russian aerial bombardments intensify, including recent drone strikes near the primary highway connecting Kyiv to Odesa. Concurrently, South Korea initiated the diplomatic withdrawal of key embassy personnel from Ukraine following a dispute involving captured North Korean combatants. Washington’s policy hesitation reflects shifting strategic priorities ahead of domestic midterms, creating operational strain for Ukrainian defensive planning. European allies are closely watching the decision, as diminished US military hardware support threatens to shift additional financial & material burdens onto NATO members.   
• UK RAF Typhoons Deployed To Saudi Arabia The UK government announced the military deployment of Royal Air Force Typhoon fighter jets to Saudi Arabia to enhance defensive capabilities against ongoing aerial threats originating from Houthi forces in Yemen. The bilateral defence agreement aims to secure critical infrastructure & maintain regional stability amid persistent missile & drone activity targeting Gulf energy facilities. Concurrently, Libya’s House of Representatives ratified a key 2019 maritime boundary accord with Turkey, signalling shifting diplomatic alliances across the eastern Mediterranean. London’s military commitment underscores deep security ties with Riyadh as Western powers seek to safeguard commercial shipping routes & regional partners. The movement highlights expanding international military engagements aimed at mitigating asymmetric operational threats across Middle Eastern airspace & vital maritime corridors. The UK has stressed that the deployment is for defensive purposes & not offensive.  
• Sudanese Border Drone Attack Escalates Conflict A devastating drone strike targeted the Amiet market in the contested Abyei region along the Sudan & South Sudan border, resulting in over 220 casualties. Local officials attributed the attack to the Sudanese Armed Forces, marking a sharp escalation in regional hostility. Concurrently, paramilitary Rapid Support Forces launched drone strikes on power infrastructure in White Nile State, disabling critical transmission lines connecting North Kordofan. The compounding military strikes have severed major energy supply nodes & intensified humanitarian strain across border communities. Regional diplomats express growing concern over the potential for wider destabilisation as fighting expands across strategic provincial corridors, threatening critical humanitarian transit channels & further complicating international mediation efforts.   
• French Cities Impose Curfews Following Civil Unrest French Prime Minister Sébastien Lecornu announced a massive police mobilization across major city centres, including Paris & Lyon, following widespread anti-government demonstrations over living costs. Local authorities implemented partial evening curfews to curb violent clashes attributed to radical factions. Demonstrations drew over half a million participants nationwide at the weekend, leading to thousands of arrests & significant municipal disruption six months prior to upcoming presidential elections. Government officials defended the heightened security posture as vital for public safety, while political opposition leaders criticized the executive response.   
• Lithuania Thwarts Sabotage Strike On Starlink Network Prime Minister Mindaugas Sinkevičius confirmed that Lithuanian law enforcement successfully intercepted an attempted incendiary sabotage attack targeting vital Starlink satellite communications infrastructure within the country. Perpetrators utilized incendiary materials in an attempt to disrupt critical digital networks relied upon for domestic & regional connectivity. Lithuanian security services elevated threat levels around key telecommunications hubs to safeguard sovereign infrastructure against asymmetric operational threats. The incident highlights escalating hybrid warfare risks facing Baltic nations as hostile actors seek to compromise civilian & military digital infrastructure. European intelligence agencies have stepped up joint monitoring operations to defend transatlantic communications architecture against coordinated physical & cyber disruption attempts across NATO’s eastern flank.

Markets

• US Equity delivered a mixed performance yesterday, driven by broad capital allocation into industrial value equities while mega-cap tech experienced minor profit-taking. Broad market breadth supported gains as investors digested economic indicators & corporate earnings updates. The Dow led major benchmarks, advancing +1.02% to close at 52,496, supported by robust institutional buying across cyclical sectors. Meanwhile, the S&P gained +0.28% to finish at 7,712, whereas the Nasdaq lagged slightly, easing -0.02% to settle at 26,425 amidst localized weakness in semiconductor valuations.
• Asian Equity bourses are currently mixed, reflecting localized economic momentum & sector-specific capital flows. The Nikkei trades higher by +0.85% at 64,617, supported by export-oriented strength. Conversely, the Hang Seng trades down by -0.35% at 23,784 as property & financial counters drag down regional sentiment. Demonstrating significant outperformance, the Kospi trades up by +2.46% at 5,689, driven by heavy institutional accumulation in technology holdings & hardware exporters. Overall regional volume remains consistent with recent daily trading averages.
• European & UK Equity futures indicate a fragmented open across major regional bourses ahead of today's open. Dax Futures trade up by +0.39%, pointing to positive opening momentum in German equities led by industrial manufacturing strength. FTSE Futures trade higher by +0.12%, signalling a steady start for London markets supported by energy producers. In contrast, CAC 40 Futures trade down by -0.37%, reflecting early downside pressure on French benchmark equities amidst broader political uncertainty & regional economic adjustments.
• UK & Eurozone Bond Markets Eurozone fixed income markets enter today's session navigating shifting yield dynamics across core sovereign paper. Benchmark 10-year Bunds sit at a yield of 3.399%, marking a -0.025% drop from yesterday & a -0.066% easing compared to last week. French 10-year OAT yields stand at 4.928%, rising +0.128% from yesterday & +0.089% compared to last week as domestic political developments influence sovereign credit risk spreads across core European debt instruments. In the UK sovereign debt market, 10-year Gilts trade at a yield of 5.414%, climbing +0.040% over the last 24 hours while maintaining a -0.032% reduction compared to last week. The yield curve maintains its broader structure as fixed income participants await this morning's CPI data & sovereign supply distribution across European rate markets.
• Currency Snapshot:
  • Sterling trades at 1.337 against the US Dollar, demonstrating intraday strengthening from 1.331 during the prior session & advancing from 1.319 compared to last week. Against the single currency, Sterling trades at 0.839 per Euro, strengthening from 0.843 yesterday & improving from 0.846 compared to last week, supported by steady capital inflows into UK assets.
  • Euro trades at 1.122 against the US Dollar, gaining slightly from 1.121 in the previous session & rising from 1.116 compared to last week. Against the Swiss Franc, the Euro trades at 0.927, holding virtually flat compared to 0.927 yesterday while reflecting a mild weakening trend from 0.932 compared to last week amidst shifting regional capital allocation.
  • Swiss Franc trades at 0.826 against the US Dollar, showing slight firming from 0.827 during the previous session & demonstrating notable strengthening from 0.835 compared to last week. Cross-currency price action reflects steady demand for safety assets across global foreign exchange markets over recent trading sessions.

Economic Data (Western European Today)

Govt Bond Auctions (Western European Today)

• None.

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 - Next: 1st November (All Saints Day) - Sunday
  • UK - Next: Christmas Day (25 December) & Boxing Day (26 December).
  • USA - Next: 11th November (Veterans Day) & 26th November (Thanksgiving)

Pending Deals & Mandates

Euros (€)

• 19th October: Gek Terna S.A. (rated Baa3 / BBB- by Moody’s & S&P), the vertically integrated leading infrastructure group in Greece, owning & operating critical concessions in the country, mandated BNP Paribas S.A., JP Morgan S.E. & Mediobanca – Banca di Credito Finanziario S.p.A as Joint Global Coordinators & Joint Bookrunners along with AXIA, Deutsche Bank, Eurobank S.A., Goldman Sachs Bank Europe SE, HSBC, Morgan Stanley, National Bank of Greece, Piraeus Bank S.A. & Optima bank S.A. as Joint Bookrunners to arrange a series of fixed income investor calls starting on Monday the 19th October.
• 20th October: Pernod Ricard (exp. Issue rating of Baa3 / BBB- by Moody’s & S&P), worldwide leader in the spirits & champagne industry, with prestigious portfolio of premium to luxury brands, has mandated Citi, ING, Natixis & Société Générale as Global Coordinators together with Barclays, BNP Paribas, Credit Agricole CIB & HSBC as Active Bookrunners to arrange a series of fixed income investor calls on Tuesday the 20th of October. ING is coordinating roadshow logistics. A debut € benchmark Dual-Tranche, Reg S Bearer, PerpNC5.25 & PerpNC8 Hybrid transaction may follow, subject to market conditions.

• 19th October: Sumitomo Life Insurance Company (exp. Issue ratings of A- / A- by S&P & Fitch) mandated JP Morgan, BofA Securities, Goldman Sachs, SMBC Nikko & BNP Paribas to arrange a series of fixed income investor conference calls commencing Monday the 19th October. JP Morgan will be coordinating logistics. A potential € benchmark, Reg S, Fixed to fixed, step-up 30NC10 callable subordinated bond offering will follow, subject to market conditions.
• 20th October: Landesbank fuer Niederoesterreich und Wien AG (exp. Issue rating of Aa1 by Moody’s), has mandated ABN, DekaBank, Erste Group, Helaba, Raiffeisen Bank International & UniCredit as Joint Bookrunners for its upcoming €500m (wng) fixed-rate Public Sector Covered Bond (Oeffentlicher Pfandbrief) with a maturity of 6.8yrs (August 2033). The issue will be labelled as European Covered Bond (Premium), will be in RegS Bearer format. The transaction will be issued under Hypo Noe’s €9.5bn Debt Issuance Programme dated 28 May 2026 & will be launched in the near future, subject to market conditions. The Issuer is available for 1-on-1 Calls upon request.
• 20th October: Sparkasse Hannover (exp. Issue rating of AAA by Fitch) mandated BayernLB, Commerzbank, Danske Bank, DekaBank & DZ Bank as Joint Lead Managers for its upcoming €500m (wng) Mortgage Covered Bond (German Hypothekenpfandbrief) with a 7yr maturity. The notes will be labelled European Covered Bond (Premium). The deal is expected to be launched in the near future, subject to market conditions. The Issuer is available for 1-on-1 Calls upon request.

• 16th October: The Free and Hanseatic City of Hamburg (rated AAA / AAA by Fitch & Scope) mandated DZ Bank as ESG Structuring Coordinator & Crédit Agricole CIB, Danske Bank, DekaBank, Deutsche Bank & DZ Bank as Joint Lead Managers for its upcoming inaugural €500m (wng) 10yr Green senior unsecured offering in LSA format. The transaction will be launched in the near future, subject to market conditions & after extensive investor calls taking place between Monday the 19th of October & Thursday the 22nd of October.
• 20th October: The German Federal State of Berlin (rated Aa1 / AAA / AAA by Moody’s, Fitch & Scope) mandated BNP Paribas, Citi, Danske Bank, DekaBank, Helaba & HSBC to lead manage its upcoming € Benchmark Landesschatzanweisung (LSA) with a maturity of 5yrs. The deal will be launched in the near future subject to market conditions.

Sterling (£)

• 20th October: BTG Pactual Europe SA (rated Baa3 by Moody’s) mandated BMO Capital Markets as Sole Global Coordinator & Joint Lead Manager, alongside Natixis & Banco BTG Pactual S.A. – Cayman Branch as Joint Lead Managers, for its upcoming inaugural £250m (wng) 3yr Senior transaction. The Issuer is available for one-on-one calls upon request on the 20th & 21st of October. The transaction is expected to launch in the near future, subject to market conditions.

Recent Supply Data

Key Market Data