• The last trading day of October may spring some issuance, as market essentially looks risk on
• There was no primary supply in € IG space yesterday for a second consecutive day
• Microsoft printed a 10-tranche $25bn issue in the US last night. A € offering was rumoured to follow
• Credit indice spreads continued to grind slightly tighter in low turnover
• Primary markets could see some activity today, although syndicates will have to be nimble
• Investor caution remains & will likely require elevated risk premiums 
• Major news yesterday from the ECB was Christine Lagarde’s departure on 07 February (9 months early)
  • ECB - held deposit facility rate unchanged at 2.50% 
• Yesterday was a zero print session for € IG, Sterling (£), Swiss Franc & US$ Reg S
  • €16.55bn WTD or 85.4% of our ‘Supply Survey’ forecast of €19.38bn
• Brent Crude has seen upward pressure from this point yesterday, currently trading at c.$116.43 (c.$113.87 this time yesterday)
• The VIX also edged higher, currently set to open at 17.20 (16.62 this time yesterday)
• iTraxx 5yr Europe & iTraxx Senior & Sub financial indices all edged higher yesterday & are set to open at 63.239 (+1.50%), 71.511 (+1.52%)  & 119.161 (+2.53%) respectively
• Pipeline:  The European IG pipeline is as follows 
  • 1 x € Corp
  • 1 x € FIG (1 x Subordinated)

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 NA
  • Avg. cover NA
• FIG
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing (covered) €0
  • Avg. IPT to Pricing (unsecured) €0
  • Avg. cover NA
• SSA
  • Total IG: €0
  • Avg. tranche size €0
  • Avg. IPT to Pricing NA
  • Avg. cover NA

Geo-Political News

• Hormuz Strait Drone Interception Escalation Iranian armed forces shot down an unmanned reconnaissance drone operating east of the Strait of Hormuz, triggering military readiness along maritime transit routes. Armed forces command in Tehran confirmed the surface-to-air missile deployment following alleged airspace boundary violations above coastal patrol corridors. The incident immediately prompted defensive naval reconfigurations from forces escorting petroleum tankers through narrow shipping lanes. Diplomatic communications between Ankara & Washington emphasised the preservation of freedom of navigation, as Turkish leadership engaged counterparts to deter retaliatory strikes. Energy transport consortia initiated emergency route reassessments to mitigate surging insurance underwriting premiums. Sovereign defence ministries across the Arabian Peninsula activated joint surveillance protocols to avert miscalculation.   
• Pyongyang Ballistic Missile Launches Confirmed North Korea conducted multiple ballistic missile test launches toward open waters within the Sea of Japan, drawing immediate condemnation from Seoul & Tokyo. Joint Chiefs of Staff in South Korea tracked the trajectory of numerous projectiles fired from inland proving grounds, prompting emergency national security sessions across neighbouring capitals. The Japanese Ministry of Defence issued urgent maritime alerts to commercial vessels traversing adjacent waters following confirmed debris impacts outside exclusive economic zones. South Korean military authorities responded by expanding radar coordination alongside regional surveillance partners to track potential secondary launches. The demonstration reflects continuous weapons modernisation directives overseen by state authorities in Pyongyang amidst deadlocked international denuclearisation diplomacy. 
• Brussels Refined Fuel Mandates Approved EU energy authorities finalised directives designed to expand domestic refining capacities & accelerate fuel reserves across member states. The regulatory framework, introduced by European Commissioner Dan Jørgensen, establishes binding hydrocarbon processing thresholds to counteract persistent import volatility & elevated global wholesale energy pricing structures. Industrial petrochemical complexes in Antwerp & Rotterdam must allocate dedicated infrastructure to bolster domestic middle-distillate stockpiles under enforceable state quotas. National ministries across Berlin, Paris, & Rome commenced technical reviews to subsidise refinery facility modernisations while mitigating supply chain disruption risks. The mandate aims to insulate continental economies from cross-border transport shocks following systemic regional infrastructure bottlenecks. 
• Yemen Maritime Shipping Strike Naval forces coordinated defensive interception across the southern Red Sea following renewed anti-ship ballistic missile alerts originating from western Yemen. Commercial container carriers operating along the Bab el-Mandeb strait received direct naval escorts as security agencies detected coastal radar emissions. Sovereign maritime centres in Djibouti confirmed several international logistics carriers executed immediate route divergences toward the Cape of Good Hope to avoid contested corridors. Joint defence commands in Washington & London coordinated reconnaissance sweeps to identify mobile coastal launch positions threatening international transit rights. Port operators in Aqaba & Jeddah reported sustained shipment delays, prompting logistics managers to reallocate container allocations across land bridge freight networks. 
• Kherson Regional Combat Operations In southern Ukraine underwent tactical shifts around Russian-occupied positions near Oleshky following intensified artillery exchanges across the Dnipro riverfront. General Staff commands in Kyiv reported precision strikes targeting logistics supply lines & ammunition depots, seeking to disrupt defensive fortifications established by Russian forces. Satellite monitoring confirmed structural damage to transport hubs along secondary supply conduits in occupied Kherson territory, constraining mechanized troop rotations. Russian field commanders deployed tactical drone squadrons to suppress counter-battery operations, while Ukrainian territorial units maintained pressure along river crossings. The military engagement highlights acute friction over southern transit arteries critical to sustaining territorial control. Analysts emphasize that ongoing combat along riverine logistics junctions directly dictates mechanised maneuver capabilities across the entire southern theatre.
• Berlin Air Combat Procurement Assessment Defence officials in Berlin initiated consultations regarding Germany's potential participation in the Global Combat Air Program consortium alongside London, Tokyo, & Rome. Defence ministry planners evaluated industrial manufacturing integration to modernise sovereign aerospace capabilities & streamline multinational procurement expenditures. Industrial contractors across Munich, Warton, & Nagoya prepared preliminary airframe compatibility audits to address operational interoperability requirements across allied defence architectures. The exploratory participation represents a notable strategic recalibration regarding European combat aircraft manufacturing alliances, potentially realigning long-term defence procurement commitments away from competing continental airframe initiatives. Parliamentary committees scheduled formal budgetary reviews to evaluate capital allocation requirements across the multidecade defence programme.   
• Sudanese Drone Attacks Hostilities across North Kordofan intensified as drone strikes launched by Rapid Support Forces struck urban infrastructure within El Obeid. United Nations monitors reported civilian casualties alongside structural damage to logistics distribution centres & power networks. Sudanese Armed Forces conducted defensive cordon operations across adjacent sectors, resulting in extensive arrests as municipal stability deteriorated. Humanitarian agencies suspended overland aid shipments from Port Sudan, stranding thousands of displaced families without access to emergency medical supplies or potable water reserves. Diplomatic envoys from the African Union renewed urgent calls for ceasefires to facilitate civilian evacuations.

Markets

• US Equity closed lower across all benchmarks as selling pressure in tech shares weighed on sentiment. Nasdaq fell -1.38% to 26,185, pressured by semiconductor weakness & valuation recalibrations. S&P retreated -0.30% to 7,720, reflecting defensive positioning across growth sectors, while Dow demonstrated relative resilience, slipping -0.25% to 52,343. Portfolio managers rotated into value-oriented cyclical equities amidst shifting yield curve dynamics, leaving broader market indices depressed heading into the global morning handover.
• Asian Equity bourses are displaying divergent performance in live trading. Hang Seng advanced +1.75% to 23,360, driven by aggressive buying in listed enterprise tech shares & mainland liquidity inflows. Conversely, Nikkei declined -2.16% to 63,263, as export-focused industrial conglomerates retreated under broad currency headwinds. Kospi dropped -4.15% to 5,691, weighed down by severe institutional liquidation across leading domestic memory hardware & semiconductor manufacturing components.
• European & UK Equity futures point to an uneven market opening across regional exchanges. CAC 40 futures lead regional sentiment, advancing +1.00% to 8,245 on solid momentum in consumer & luxury constituents. FTSE futures trade higher by +0.22% to 8,460, supported by firm resource valuations. Conversely, DAX futures decline -0.20% to 19,890, reflecting persistent industrial softness & export sector drag ahead of the cash market bell.
• UK & Eurozone Bond Markets sovereign bond markets are set to open with benchmark yields holding narrow ranges as investors evaluate fiscal issuance pressure & regional inflation dynamics. The 10yr Bund trading at 3.354%, easing marginally from the previous session's 3.358% level, while French ten-year OATs is standing at 4.910% against 4.920% previously. The sovereign spread reflects sustained scrutiny over French legislative budget progress & fiscal targets. The 10yr Gilt is trading at 5.294%, declining from 5.345% recorded during the prior session as market participants balance domestic fiscal projections against BofE rate policy paths. Gilts display slight flattening pressure along the belly of the curve compared to levels from last week, maintaining tight correlation with shifts in transatlantic fixed-income duration pricing throughout today's session.
• Currency Snapshot:
  • Sterling trades at 1.338 against the US dollar, firming by +0.05% from the prior day's close of 1.338 & extending a strengthening bias compared to last week's 1.337 baseline. Against the euro, the British pound trades at 0.836, displaying marginal appreciation relative to 0.836 recorded yesterday & consolidating noticeable multi-session strength compared to last week's 0.838 print.
  • Euro trades at 1.118 against the US dollar, posting a slight gain of +0.02% from yesterday's 1.118 level, although softening compared to a week ago when the pair traded at 1.120. Regional growth differentials & monetary policy expectations continue to restrain single-currency appreciation against external crosses.
  • Swiss Franc trades at 0.823 against the US dollar, strengthening +0.22% from yesterday's 0.824 level & appreciating notably compared to last week's 0.825 valuation. Versus the euro, the franc stands at 0.920, strengthening +0.19% from 0.922 yesterday & consolidating gains compared to last week's 0.924 rate.

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 (€)

• 28th October: APA Infrastructure Limited (rated Baa2 / BBB by Moody’s & S&P), guaranteed by APA Group Limited, mandated BNP Paribas, BofA Securities, HSBC & J.P. Morgan as Joint Lead Managers to arrange a series of fixed income investor meetings & calls commencing Monday, 2nd November. A Benchmark 10yr € RegS senior unsecured 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.

Recent Supply Data

Key Market Data