End-of-week Volatility, UK Thames Water Crisis, and Stock-Specific Risks

Published on 3 July 2023

Phil Milburn, co-head of global fixed income team at Liontrust discusses how trading desks should prepare for this week as volatility in the US is expected to be concentrated in the latter half. In Europe and the UK, he looks at how to approach the Thames Water Crisis, the threat of contagion risks to other securities, and stock-specific risks.

North America

  • US equities volumes are low for the  year and bid-ask spreads are wide. US IG volumes are up week on week and spreads are tight.
  • Primary equities: IPOs are expected in Tech on the New York Stock Exchange on July 5.
  • Data: Non Farm Payrolls and Unemployment numbers out on Friday, July 7.
  • US axe data, which is within normal ranges, indicates a higher proportion of bids versus asks in credit.

Europe and the UK

  • US equities volumes are near year-to-date averages and spreads are tight. Euro IG volumes are low but bid-ask spreads are tight for 2023.
  • Primary equities: IPOs are expected in Tech on Euronext Milan (July 3) and Industrials on Deutsche Börse (July 7).
  • Data: Eurozone Producer Prices on July 5 and Retail Sales on July 6. Eyes are on UK Thames Water.
  • EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer bids versus asks in credit.
  • GBP axe data, within normal ranges, suggests a slight skew to net buying versus selling of credit.