Advantage Data High Yield Bond Market Summary

European Bond Research - July 12, 2019

Posted by Corey Mahoney on Jul 12, 2019 12:50:26 PM
EURO ZONE INDUSTRIAL PRODUCTION REBOUNDED in May advancing by 0.9 percent exceeding estimates a pleasant surprise to many investors. The production of consumer goods drove output higher notably in France increasing 2.1 percent month-over-month. Despite the expansion in all major economies production is down 0.5 percent from one year prior. “If you look at the industrial production figures for the Eurozone they were better than expected, which is obviously a welcome sign - and in the background you have the Fed as well and we now expect a cut in July.” FTSE 100 -0.13%, German DAX -0.03%, CAC 40 +0.29%, STOXX Europe 600 -0.01%. The 10-year Gilt dipped 0.2 basis points.  

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GERMAN AUTOMAKER DAIMLER slashed its 2019 profit forecast for the fourth time this year, recently warning the luxury carmaker will report a loss of 2.8 billion euros for the second quarter.  In a statement Daimler, the maker of Mercedes said “new information leading to a revised risk assessment” of the global airbag recall and regulatory compliances surrounding the diesel vehicles “lead to an increase in expected expenses by around 1.6 billion euros”.  ADI (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily yield increment for high-grade versus high-yield constituents. High-grade bonds edged out high-yield debt as of 3 PM, London time.  Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded,  ArcelorMittal SA (USD) 5.25% 8/5/2020 made some analysts' 'Conviction Buy' lists. (See the chart for ArcelorMittal SA below). Corey Mahoney (cmahoney@advantagedata.com).
 

 

Credit-Default Swap Market


LATEST NEWS: Top moves, sovereign tighteners (5Y): Ireland 27 bp and Germany 11 bp. Sovereign wideners (5Y): Sweden 11 bp and UK 30 bp.

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New Issuance


New Issues New Issues [Continued]

1. Accent Capital PLC (GBP) 2.625% 7/18/2049 (07/11/2019): 350MM Secured Notes, Price at Issuance 97.96, Yielding 2.725%.

2. Lunar Luxembourg SA (EUR) 0% 7/18/2024 (07/12/2019): 152MM Secured Notes, Price at Issuance 100, Yielding 0%.

 

ADI Indexes


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DATA CHECK:
iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 07/12/2019, 133.43 NAV as of 07/12/2019, 105.31
Daily NAV Change (-0.03%)    Daily NAV Change (%) -0.10%

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 ratecurrently 7.5% (seasonally adjusted, May2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value -0.342%, as of 07/11/2019

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Topics: Analytics, bonds, junk bonds, bond market, corporate bonds, market analytics, New Issues, News, research, EU, market update, European


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