MNI Credit Weekly: Whatever it Takes

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Executive Summary: 

• Spreads remain volatile, with another reversal this week at 2.8bp tighter. Real Estate widened 8bp due to higher rates. Defence, Construction and Automotive names outperformed on fiscal stimulus and tariff developments. Index spread levels are now at the tightest levels since October 2021.
• It was another wild week in macro with the biggest one-day move in bund yields since the collapse of the Berlin Wall. That followed massive EU defence spending plans. Treasuries, on the other hand, were underpinned by dovish labour market data and policy-induced growth fears.
• Fund flows remained firm for IG across both regions, while Euro equities once again set a record inflow of $4.1bn, the highest since Feb 2022.  
• It was a quieter week for supply with €6.5bn priced. Expectations for next week are marginally higher.