EM ASIA CREDIT: Results: Reliance (RILIN) reporting Q3 numbers

Natixis recommend 10s30s BTP steepeners.

• When it comes to rationale they point to “potential steepening by mid-January 2025 due to dynamic January issuance focused on longer maturities, historical seasonality showing an average steepening of 8bp, and a favourable 3-month z-score indicating attractiveness compared to other EGBs.”

November's retail sales report showed a strong contribution to growth from the two single-largest retailing categories, with activity beyond those areas looking solid but less impressive.

• Motor vehicles/parts dealers (4-month best +2.6% M/M, just under 20% of total retail sales) and non-store retailers (i.e. online sellers, +1.8% M/M, 17% of retail sales) helped boost the overall retail sales reading to 0.7% M/M (0.5% prior, 0.1pp upward rev).  Auto sales continue to rebound from a summer lull, with nominal readings boosted by stronger inflation in the category.
• Core measures were on the soft side of expectations: ex-autos/gas at 0.2% M/M (0.2% prior) and control group 0.4% (-0.1% prior).
• Multiple sectors saw M/M contraction, including notably food services/drinking places, the third-largest retail category (14% of total sales), a "discretionary" sector, and one of the only readthroughs into non-goods consumption: it shrank 0.4%, the first contraction in 8 months and the largest drop in 10.
• Breadth looks like an issue therefore, but the trend gains in consumption remain positive.
• Total retail sales are up 3.8% Y/Y, the highest reading since December 2023, with the 3M/3M annualized rate up 7.2% - a 20-month high.
• From a GDP perspective too, control group sales remain robust: up 4.3% Y/Y and 5.6% 3M/3M annualized, the latter of which is a rough proxy of real PCE goods growth.
• With retail sales growth more than keeping up with CPI, should help underpin real Q4 GDP growth projections, including the FOMC's estimates ahead of its SEP publication tomorrow.