European Bond Research - August 12, 2019

SOVEREIGN YIELD CURVE in Europe have by and large fallen. The continued march of EU’s to go negative pressed on today. FTSE 100 -0.41%, German DAX -1.31%, CAC 40 -1.16%, STOXX Europe 600 -0.82%.  The 10-year Gilt lost 3.1 basis points. 

RENAULT BONDS had an uptick in trading due to the fact that they may restructure the relationship with Nissan in order to facilitate the merger with Fiat. 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,  Actavis Funding SCS (USD) 4.75% 3/15/2045 made some analysts' 'Conviction Buy' lists. (See the chart for Actavis Funding bonds below). Corey Mahoney

 

LATEST NEWS: Top moves, sovereign tighteners (5Y): Korea 31 bp and Italy 190 bp. Sovereign wideners (5Y):  Denmark 11 bp and France 22 bp.

New Issues	New Issues [Continued]
1. Barclays Bank PLC (USD) 2.2% 8/14/2019 (08/12/2019): 1000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.2%.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 08/09/2019, 135.22 NAV as of 08/09/2019, 104.87 Daily NAV Change (%) -0.04% Daily NAV Change (%) -0.13%

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 7.5% (seasonally adjusted, May 2019)
• Eurostat's quarterly GDP: 0.4% (2019 Q1)
• 6-month Euribor: current value -0.393%, as of 08/08/2019

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