Advantage Data High Yield Bond Market Summary

European Bond Research - May 14, 2019

Posted by Corey Mahoney on May 14, 2019 12:22:10 PM
INVESTMENT GRAD EUROPEAN BONDS EDGED OUT HIGH YIELD DEBT in net prices linked to actual trades. European equities bounce back following optimism from the US saying a trade deal will eventually be achieved with China, We'll let you know in about three or four weeks whether or not it was successful”. The 10-year Gilt rose 0.6 basis points.  FTSE 100 +1.09%, German DAX +0.97%, CAC 40 +1.50%, STOXX Europe 600 +1.01%.

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EUROZONE INDUSTRIAL OUTPUT SANK 0.3 PERCENT IN MARCH for the second consecutive month. Output in France and Italy continued to decline meanwhile, in Germany output increased.  Antonio Patuelli was asked if FITD would rescue Carige he responded, “The ruling is not yet executive. Sixty days have not gone by yet from when it was notified. So this is a debate which has no legal basis”. BlackRock pulled out of a 720 million euro deal to rescue the failing bank supported by other Italian bank who agreed to take a 43 percent stake in the deal.  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, France Telecom (USD) 5.375% 1/13/2042 made some analysts' 'Conviction Buy' lists. (See the chart for France Telecom bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.731 1.740 -67.4  
Belgium  10 0.430 0.437 -197.5  
France  10 0.331 0.345 -207.4  
Germany  10 -0.068 -0.042 -247.3  
Italy  10 2.695 2.690   29.0
Japan  10 -0.046 -0.045 -245.1  
Netherlands  10 0.118 0.142 -228.7  
Portugal  10 1.152 1.115 -125.3  
Spain  10 0.989 0.978 -141.6  
Sweden  10 0.064 0.069 -234.1  
U.K.  10 1.102 1.138 -130.3  
U.S.  10 2.405 2.468 ...

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): UK 28 bp and France28 bp. Sovereign wideners (5Y): China 51 bp and Ireland 32 bp.

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New Issuance

New Issues New Issues [Continued]

1. European Investment Bank (PLN) 2.875% 11/15/2029 (05/13/2019): 1000MM Senior Unsecured Notes, Price at Issuance 99.396, Yielding 2.94%.

2. Stockholm, City of (SEK) FLT% 5/21/2024 (05/14/2019): 1600MM Senior Unsecured Notes, Price at Issuance 103.604.

 

ADI Indexes

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DATA CHECK:
iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 05/14/2019, 131.59 NAV as of 05/14/2019, 103.08
Daily NAV Change (%) -0.02% Daily NAV Change (%) +0.32%

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 7.7% (seasonally adjusted, March 2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1 Preliminary)
  • 6-month Euribor: current value -0.231%, as of 05/13/2019

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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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