Advantage Data High Yield Bond Market Summary

European Bond Research - March 14, 2019

Posted by Niral Mehta on Mar 14, 2019 12:09:22 PM
EUROPEAN SHARES RALLIED HIGHER after UK parliament voted a deal must occur between the UK and the European Union; creating a "stable" environment for the near term. David Lafferty, Chief Market Strategist at Natixis stated, “Strong macro data, lifted by better earnings trends, and confirmed by stable-to-rising yields will increase equity prices.” There is “gradual” optimism being priced into the markets and barring something highly unlikely, the “possibility of an actual no-deal zero but less than 5 percent,” mentioned Tim Graf, Head of Macro Strategy at State Street Global Advisors. The Pound slipped 0.7 percent after advancing by more than 1 percent on Wednesday. The UK 10-year Gilt rose 2 basis points. FTSE 100, +0.50%, STOXX Europe 600 +0.63%, CAC 40 +0.63%, German DAX +0.18%.

BANKS CHARTER COURT AND ONESAVINGS are set to form Britain’s largest “specialist lender” in a merger that will boost their “defenses in the face of uncertainty brought on by Brexit.” Following the merger of the two companies, they will hold an aggregate market value of 1.75 billion pounds. OneSavings CEO, Andy Golding announced, “Both lenders are strong and can leverage resources to reduce headwind around Brexit.” The lending sector faces a “string of tax and regulatory changes,” in which consolidation of resources can be beneficial to companies. 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-yield debt as of 3 PM, London time. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, BP Capital Markets Plc (USD) 2.518% 1/16/2020 made some analysts' 'Conviction Buy' lists. (See the chart for BP Capital Markets Bondsbelow). Niral Mehta (

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.968 2.043 -64.0  
Belgium  10 0.536 0.546 -207.2  
France  10 0.470 0.415 -213.8  
Germany  10 0.066 0.057 -254.2  
Italy  10 2.559 2.540 -4.8  
Japan  10 -0.046 -0.030 -265.4  
Netherlands  10 0.156 0.151 -245.2  
Portugal  10 1.341 1.332 -126.7  
Spain  10 1.198 1.069 -140.9  
Sweden  10 0.291 0.297 -231.7  
U.K.  10 1.199 1.166 -140.9  
U.S.  10 2.608 2.609 ...

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Finland 12 bp and Belgium 23 bp. Sovereign wideners (5Y): France 29 bp and Portugal 68 bp.

New Issuance

New Issues New Issues [Continued]

1. Raiffeisen Bank Intl. AG (EUR) 1% 3/29/2027 (03/13/2019): 50MM Senior Unsecured Notes, Price at Issuance 100.5, Yielding .94%.

2. Aegean Airlines SA (EUR) 3.6% 3/12/2026 (03/13/2019): 200MM Unsecured Notes, Price at Issuance 100, Yielding 3.6%.

3. Sanofi (EUR) 0% 3/21/2022 (03/13/2019): 850MM Senior Unsecured Notes.


ADI Indexes

iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/14/2019, 130.40 NAV as of 03/14/2019, 102.91
Daily NAV Change (%) +0.18% Daily NAV Change (%) +0.31%

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 7.8% (seasonally adjusted, January 2019)
  • Eurostat's quarterly GDP: 0.2% (2018 Q3 Final)
  • 6-month Euribor: current value -0.232%, as of 03/13/2019

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Topics: Analytics, bonds, bond market, market analytics, research, EU, market update, European

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