• ‘Risk-on’ open
• Moody’s held the Aa3 rating of France, maintaining the negative outlook; contrary to market & syndicate consensus - provides an immediate reprieve though underlying debt issues remain
  • Justified by emphasizing that the government’s debt affordability & financing structure remain resilient in the near term (long average debt maturity profile)
  • & on the assumption that parliament will ultimately adopt a deficit-reducing budget & that current political & social pressures will moderate
• Fed & ECB this week likely to front-load issuance again
  • FOMC - Rate announcement @ 6:00pm GMT on Wednesday 28th 
    • ‘Hold’ with Hawkish tone (9.4% probability of rate hike)
  • European Central Bank - Rate announcement @ 1:15pm GMT on Thursday 29th 
    • ‘Hold’ with Hawkish tone (2.7% probability of rate hike)
• Investors more receptive to shorter tenors
• Half term school holidays in UK & Belgium this week
• UK Budget on Wednesday & elections in Israel tomorrow
• OAT vs Bund 10yr spread at +167.4

CORP:

• Forecast for week €8.66bn (avg.)
  • Gek Terna S.A. € bmk, 7yr
• Investors demanding NIC’s of 10 to 25bp+
• Meta is mooted as a candidate this morning for a potential multi-tranche debut € (potentially alongside a US$)
  • Opinions are firmly split on the probability of an issue
  • Meta stated in Q3 results that issuing debt had the ‘potential to negatively affect their ratings’
  • If they do come a €5 to €10bn seems likely

FIG

• Forecast for week €4.47bn (un secured avg.) & €1.67bn (covered avg.)
  • Sumitomo Life € bmk, 30NC10 Subordinated
• Investors demanding NIC’s of c.5 to 10bps (unsecured) & NIC’s of c.5bps (for Covered issues)

SSA

• Forecast for week €4.58bn (avg.)
  • Hamburg €500m, 10yr Green
  • ESM could be c.€1.5 to 2bn (annual target of c.€7bn & priced €4.5bn YTD)
• Investors seeking NIC’s of c.2bp+
• Issuance likely to remain short (up to 5yrs)

• Friday was a zero print day in € IG
  • €19.95bn total for last week (105.9% of the ‘Supply Survey’ forecast of €18.83bn)
• Sterling (£) delivered £250m from 1 deal (1 x FIG) via 1 tranche
  • £1.75bn total for last week (155.6% of the ‘Supply Survey’ forecast of £1.13bn)
• No issuance on Friday in the Swiss Franc & US$ Reg S markets
• Brent Crude remains elevated, though off its recent highs, with an exchange of words between the US & Iran, currently trading at c.$114.97 (c.$116.12 at Friday’s ‘End of Day’).
• The VIX widened on Friday, currently set to open at 19.45
• iTraxx 5yr Europe & iTraxx Senior & Sub financial indices widened on Friday & are set to open at 68.434 (+2.29%), 78.266 (+2.27%) & 135.062 (+3.19%) respectively (% △ to this time on Friday morning).
• Pipeline: The European IG pipeline is as follows (unchanged from Wednesday's close). 
  • 1 x € Corp
  • 1 x € FIG (1 x Subordinated)
  • 2 x € SSA (1 x Inaugural Green Oct 23rd earliest & 1 x Inaugural DNN)

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

Primary IG Supply Survey Results for This Week

Key € IG Supply Stats for Last Week

• Corporate
  • Total IG: €5.15bn
  • Avg. tranche size €515m
  • Avg. IPT to Pricing -27.9 
  • Avg. cover 2.75 X
• FIG
  • Total IG: €13.3bn
  • Avg. tranche size €739m
  • Avg. IPT to Pricing -3.7 (covered) €
  • Avg. IPT to Pricing -24.7 (unsecured) €
  • Avg. cover 1.72 X
• SSA
  • Total IG: €1.5bn
  • Avg. tranche size €750m
  • Avg. IPT to Pricing -1
  • Avg. cover 4.3 X

Geo-Political News

• Calm Reigns in France Over the Weekend as Moody's Maintains Rating French authorities successfully prevented a recurrence of violent unrest & widespread looting across major urban centres over the weekend following a massive deployment of law enforcement personnel. Massive public demonstrations across Paris remained overwhelmingly peaceful. Adding to the fiscal clarity, Moody’s preserved France’s sovereign credit rating at Aa3 late Friday, declining to issue a downgrade that financial markets had broadly priced in. However, the agency retained its negative outlook, reflecting ongoing structural budget deficits & heightened political uncertainty following recent legislative friction. French sovereign bonds face lingering pressures as market participants evaluate long-term fiscal consolidation paths, yet the absence of systemic operational disruptions & an immediate debt rating cut provides a brief respite for domestic asset stability.
• Trump Signals ‘Imminent Decision’ Regarding Iran Speaking at an event in Florida over the weekend, Trump addressed rising Middle Eastern tension, stating that a definitive decision point regarding Tehran is rapidly approaching. In response to recent threats & hostile actions directed at American military assets by Iranian forces & Houthi rebels, Trump stated that direct military strikes remain a distinct possibility, alongside the alternative of negotiating a comprehensive diplomatic agreement; or as he said it, “There's a possibility I will [attack]. There's also a possibility we'll have a nice big beautiful agreement.” Highlighting the core diplomatic friction, Trump questioned whether Iranian leadership would honour commitments if a deal were finalised, noting that while Tehran seeks negotiations, compliance guarantees remain uncertain.
• Lula Secures Brazilian Election Victory Amid Electoral Disputes Incumbent leftist President Luiz Inácio Lula da Silva secured victory in Brazil’s national presidential election following a highly competitive vote. The ‘surprise’ result immediately drew sharp criticism & formal challenges from the opposition, who questioned the validity of the result. Brazil remains a critical sovereign entity in global commodity supply chains due to its massive reserves of rare earth minerals & vital agricultural exports. Lula’s victory re-establishes a foreign policy stance widely regarded as pro-China, raising significant strategic implications for Western trade alliances & international resource security.
• Serbian Government Ousted in Elections Following Student Protests Widespread, student-led protest movements achieved a decisive political breakthrough in Serbia as the ruling party suffered defeat in parliamentary elections. The electoral outcome effectively ended 14 yrs of hardline, right-wing governance led by the incumbent president, whose administration faced sustained public criticism over democratic governance & institutional corruption. The political shift follows months of civil demonstrations across Belgrade, marking a dramatic realignment in Western Balkan politics. The incoming parliamentary leadership faces immediate economic challenges, structural governance reforms, & delicate diplomatic balancing between Eastern European security alliances & EU integration objectives.
• Corporate AI Capex Pressures Global Equity Sentiment Escalating infrastructure spending commitments continue to face intense scrutiny from equity investors. Despite robust corporate financial performance & largely solid Q3 revenue prints across major mega-cap tech, market participants are expressing growing concern over diminishing near-term free cash flows. The multi-billion-dollar investments required for high-performance computing, data centres, & specialised semiconductor chips are effectively offsetting earnings optimism, prompting portfolio managers to re-evaluate capital allocation strategies. Institutional funds are increasingly demanding tangible revenue monetization timelines to justify the soaring operational spending. The ongoing re-pricing of tech valuations highlights a broader structural rotation, as elevated capital outlays continue to weigh heavily on sector performance.
• UK Prepares for High-Stakes Fiscal Budget Political attention in London is focused on the HM Treasury as the UK government prepares to deliver its annual fiscal budget on Wednesday. Chancellor of the Exchequer John Healey’s 1^st budget faces intense pressure to address a substantial fiscal deficit while avoiding spending cuts to essential public services. Market participants anticipate targeted tax adjustments, altered public borrowing rules, & updated macroeconomic forecasts from the Office for Budget Responsibility. The fiscal presentation is expected to significantly impact debt issuance schedules, domestic gilt yields, & corporate tax frameworks across the British economy.
• Israel Prepares for National Parliamentary Elections Amid Regional Tension Voters across Israel are preparing to cast ballots tomorrow in a pivotal national parliamentary election that will determine the composition of the Knesset & the country's executive leadership. The election takes place against a backdrop of severe regional security challenges, complex military operations, & ongoing diplomatic discussions regarding regional ceasefires. Electoral outcomes are expected to directly influence national defence policy, fiscal spending allocations, & strategic security posture across the region. Economic analysts highlight that political stability is essential for restoring domestic fiscal balance, stabilizing business sentiment, & managing elevated government debt levels incurred through defence expenditures.

Markets

• US Equity markets on Friday experienced widespread selling pressure, driven by persistent concerns over elevated tech valuations & corporate capex burdens. The Dow fell 653 points to close at 52,215, representing a decline of -1.23%. Broad-market losses extended across the exchange as the S&P dropped -0.52% to finish at 7,624. Meanwhile, the tech sector saw modest relative resilience, with the Nasdaq sliding -0.21% to end at 25,955, as selective dip-buying in semiconductor stocks cushioned broader downside pressure.
• Asian Equity bourses are mixed today across the region. The Nikkei trades down -0.23% at 62,547, weighed down by tech exporter losses. In contrast, the Hang Seng trades up +0.55% at 23,221, supported by gains in real estate & consumer internet equities. Meanwhile, the Kospi trades lower by -1.0% to stand at 5,495, driven by heavy foreign institutional selling across domestic semiconductor manufacturers & battery producers following broader global tech sector weakness.
• European & UK Equity futures indicate a varied opening across major exchanges today. FTSE futures trade up +0.35%, signalling positive momentum for London equities supported by steady energy & mining valuations. DAX futures also trade higher by +0.26%, pointing to modest opening gains across industrial sectors. Conversely, CAC 40 futures trade down -0.37%, reflecting ongoing investor caution & localized selling pressure across French corporate equities prior to the European open.
• UK & Eurozone Bond Markets Fixed income markets are set to open with a busy week of inputs ahead. OAT’s will be set to react to a calmer weekend & Moody’s holding the Sovereign rating steady at Aa3. The 10yr Gilt currently yields 5.359%, easing -0.017% from Thursday's close. The 10yr Bund stands at 3.345%, declining -0.075%. The 10yr OATs is holding above 5.0% at 5.018%, firming slightly by +0.007% from 5.011%.
• Currency Snapshot:
  • Sterling trades at 1.337 against the US dollar, posting a gain of +0.50% from 1.331 & strengthening significantly compared to last week's level of 1.319. Firming rate expectations support the currency ahead of domestic fiscal policy clarity.
  • Euro trades at 1.122 against the US dollar, edging up +0.03% from 1.121 & strengthening compared to last week's level of 1.116. Against Sterling, the euro trades lower at 0.839, down -0.58% from 0.843, extending a weakening trend compared to last week's level of 0.846.
  • Swiss Franc trades at 0.824 against the US dollar, gaining +0.30% from 0.827 & strengthening compared to last week's level of 0.835. Against the euro, the franc trades at 0.925, appreciating +0.26% from 0.927 & strengthening compared to last week's level of 0.932.

Economic Data (Western European Today)

Govt Bond Auctions (Western European Today)

Holidays

• The Vienna Stock Exchange is closed today for Austria's National Day.
• It is an October Bank Holiday today in Dublin, though its exchange is open (local banks are closed). 
• There are no other 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.

• 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.

• 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.
• 21st October: European Stability Mechanism (ESM) (rated Aaa / AAA / AAA / AAA by Moody’s, S&P, Fitch & Scope) appointed DZ Bank & Société Generale as Digital Advisory Banks & mandated DZ Bank, HSBC, Santander & Société Generale to joint lead manage an inaugural Digitally Native Note transaction maturing in April 2030. No further group. The Digitally Native Notes will be issued on a distributed ledger technology (DLT) platform operated by Clearstream Europe AG (D7 DLT Platform) & in the context of the Eurosystem's Pontes initiative. The Digitally Native Notes are eligible for clearance & settlement through all traditional Clearstream Banking & Euroclear Bank SA/NV rails. A € benchmark transaction will follow subject to market conditions.

Recent Supply

Key Market Data