Advantage Data High Yield Bond Market Summary

European Bond Research - March 4, 2019

Posted by David Diggins on Mar 4, 2019 12:55:33 PM
EUROPEAN SHARES RISE AS TRADE WAR RESOLUTION HOPES CREATES OPTIMISM. Deutsche Bank strategist Jim Reid stated, “Sentiment has improved overnight on the positive trade headlines with China’s markets leading the advance.” The chemical sector was trading in negative territory, weighed down by Victrex, downgraded by Citigroup. EU Trade Commissioner will meet with the U.S. Trade Representative, Robert Lighthizer on March 6 to converse about negotiating a mandate for a trade deal on industrial goods and raise concern over potential future U.S. tariffs. Eurozone producer prices slightly rose in February attributing to an inflation rate of 1.4%. The UK 10 year Government Bond decreased two basis points. FTSE 100 +0.39%, STOXX Europe 600 +0.23%, CAC 40 +0.41%, German DAX -0.08%.

THERESA MAY set out plans for a 1.6 billion pound fund to support economic growth in Brexit-supporting communities. Theresa May stated, “It can make a vast difference in creating the jobs, actually putting the skills in place and changing people’s lives in a modern positive economy.” Japanese companies could relocate away from Britain in the coming months if the uncertainity around Brexit persists, affecting overall growth in the economy. ADI (Advantage Data Inc.) corporate-bond index data showed a net daily yield increment for high-grade versus high-yield constituents. High-grade bonds edged out high-grade debt as of 3 PM, London time. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, Mylan Inc. (USD) 3.95% 6/15/2026 made some analysts' 'Conviction Buy' lists. (See the chart for Mylan bonds below.) Niral Mehta  (nmehta@advantagedata.com).
 

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 2.164 2.114 -58.3  
Belgium  10 0.702 0.688 -204.5  
France  10 0.582 0.575 -216.5  
Germany  10 0.186 0.186 -256.0  
Italy  10 2.733 2.759 -1.4  
Japan  10 -0.008 -0.026 -275.5  
Netherlands  10 0.289 0.292 -245.8  
Portugal  10 1.488 1.469 -125.9  
Spain  10 1.203 1.171 -154.3  
Sweden  10 0.414 0.397 -233.3  
U.K.  10 1.298 1.175 -144.8  
U.S.  10 2.747 2.718 ...

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Belgium 25 bp and Dubai 122 bp. Sovereign wideners (5Y): Finland 13 bp and Korea 29 bp.

New Issuance

New Issues New Issues [Continued]

1. Aroundtown SA (HKD) 3.69% 3/11/2024 (03/04/2019): 430MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.69%.

 

ADI Indexes

DATA CHECK:
iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/4/2019, 129.71 NAV as of 03/4/2019, 104.48
Daily NAV Change (%) +0.08% Daily NAV Change (%) +0.12%

OVERALL EUROPEAN CREDIT MARKET:
The euro-zone economy shows signs of positive momentum, although conditions are expected to deteriorate hindered by the termination of quantitative easing, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment rate: currently 7.9% (seasonally adjusted, November 2018)
  • Eurostat's quarterly GDP: 0.2% (2018 Q3 Final)
  • 6-month Euribor: current value -0.230%, as of 03/01/2019

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Topics: High Yield, Investment Grade, bond market, market analytics, EU, market update, European


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