CAUTION BECAME MORE ACUTE, leading European investment-grade bonds to easily outpace junk debt in net price gains linked to actual trades. Bids for high-yield debt were damped in parallel with a downside shift to the red in the pan-European Stoxx 600, as investors 'hunkered down' ahead of a key U.K. election vote Thursday. In a 'tough-to-call' test of Prime Minister Theresa May's conservative majority, implications will emerge for her forward strength in Brexit negotiations. Meanwhile a Middle-East spat between Qatar and its neighbors weighed on high-yield debt prices, as Nymex oil fluctuated in the $47 range.
ADI (Advantage Data Inc.) extensive corporate-bond index data showed a net daily yield increment for high-yield over investment-grade constituents. Investment-grade bonds outpaced high-yield debt in net prices. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, Barclays PLC 3.2% 8/10/2021 made some analysts' 'Conviction Buy' lists. (See chart for Deutsche Telekom/Vodafone bonds, next page.) M. F. Brown mbrown@advantagedata.com
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