Overall, European credit indices have been trading range-bound during the past week, with the European main and cross over indices being broadly unchanged compared to last week. Thus iTraxx Main widened 1.5bp to 77. While iTraxx Crossover widened 9bp to 336bp.
In the Nordic region we saw issuance from amongst others: Danske Bank with a 4-year NOK5bn covered bond printing at 3M NIBOR+60bp, Akademiska Hus with a 4-year SEK senior unsecured SEK500m printing at 3M STIBOR+50bp, and Finnish Aspo Oyj with a EUR25m junior subordinated bond with first call date in 2020 with a fixed coupon of 6.75% p.a. to first call date.
German PMI data which was released on Monday morning was better than expected. Earlier French PMI was also higher in May driven by the service sector. Overall it seems the drag on the euro area from the uncertainty over the EM turmoil in early 2016 is fading and activity lifting despite new uncertainty over the Brexit vote. This is encouraging for the euro area outlook. If the UK remains in the EU we expect to see stronger investment growth and a relief rally in credit spreads of credit with Brexit exposure.
In the US, there are only a few important economic data releases this week. Today the Markit PMI Manufacturing index for May is due for release. We see indications of a turn in the US manufacturing cycle, as it looks like headwinds have decreased due to a stabilisation in China and a weaker dollar.
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