European Bond Research - August 15, 2019

Posted by Pierre Robert on Aug 15, 2019 2:58:50 PM
PRESSURE ON SOVEREIGN CURVES CONTINUES to push yields and stocks down amid recession worries. Flight to safety has continued. FTSE 100 -1.3%, German DAX -.7%, CAC 40 -.27%, STOXX Europe 600 -.4%.  The 10-year Gilt -4 basis points.

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RENAULT BONDS continued higher based on possible merger with either Fiat or PSA. Merger would create economies of scale to better help all the companies involved. 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,  Renault SA (EUR) 2% 9/28/2026 made some analysts' 'Conviction buy' lists. (See the chart for Renault SA bonds below). Pierre Robert


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Korea 33.06 bp and Italy 222.39 bp. Sovereign wideners (5Y):  Denmark 11.42 bp and France 23.25 bp.

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New Issuance

New Issues New Issues [Continued]

1. Credit Suisse Group AG (USD) 6.375% PERP 144A (08/14/2019):1750MM Junior Subordinated Notes, Price at Issuance 100, Yielding 6.38%.

2. Credit Suisse Group AG (USD) 6.375% PERP Reg S (08/14/2019):1750MM Junior Subordinated Notes, Price at Issuance 100, Yielding 6.38%.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 08/15/2019, 135.67 NAV as of 08/15/2019, 104.53
Daily NAV Change (%) +.18% Daily NAV Change (%) +.05%

The euro-zone economy shows signs of negative momentum, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment ratecurrently 7.5% (seasonally adjusted, May 2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value -0.406%, as of 08/14/2019

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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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