European Bond Research as of May 9, 2017

Posted by Michael F. Brown on May 9, 2017 1:02:04 PM

EUROPEAN HIGH-YIELD BONDS RETAINED FAVOR, easily outpacing investment-grade debt in net price gains linked to actual trades. Multiple factors conspired to keep investors with a 'risk-on' bias - including the afterglow of victory by France's centrist Emmanuel Macron, upbeat trade data out of Germany, and a pullback in the euro. A string of gains in European shares rounded out the risk-tolerant tone, as the pan-European Stoxx 600 equities index moved to the solid green.


A weaker euro on the heels of the Macron victory helped securities in the export-related sectors. An uptick in the financial group lent further sector cues to corporate-bond traders, as Commerzbank AG shares added 2.8%, and Credit Suisse Group AG jumped 6.8%, before profit-taking. M&A (Mergers & Acquisitions) news in the materials group also figured into today's market dynamic, as  Glencore PLC shares climbed 2.6%. ADI (Advantage Data Inc.) extensive corporate-bond index data showed a net daily yield increment for investment-grade over high-yield constituents. High-yield bonds outpaced investment-grade debt in net prices. Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded, Ensco PLC 4.7% 3/15/2021 made some analysts' 'Conviction Buy' lists.

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M. F. Brown      Global Head of ADI Research

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Topics: bonds

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