European Bond Research - August 9, 2019

Posted by Corey Mahoney on Aug 9, 2019 11:59:48 AM
FRENCH INDUSTRIAL OUTPUT FELL 2.3 percent month-over-month the fastest pace in over a year, a significant reduction in petroleum manufacturing caused the drop. Germany’s exports slightly declinedin June as imports rose for the first time in three months. 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. 

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UK PHARMACEUTICAL CONGLOMERATE AstraZeneca advanced 1.7 percent following encouraging news their drug Tagrisso helped lung cancer patients live longer. AstraZeneca bonds also traded higher in particular the AstraZeneca PLC (EUR) 1.25% 5/12/2028. The UK economy unexpectedly contracted for the first time since 2012 as GDP shrunk by 0.2 percent during the second quarter. Given the growing threat of a no-deal Brexit that looms menacingly overhead, it would not be at all surprising if the current quarter also shows a contraction.” 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


Credit-Default Swap Market

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

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New Issuance

New Issues New Issues [Continued]

1. Wells Fargo Bank NA (USD) 3.2% 8/15/2026 (08/08/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.2%.


ADI Indexes

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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%

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 ratecurrently 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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Topics: Analytics, bonds, junk bonds, bond market, corporate bonds, market analytics, New Issues, News, research, EU, market update, European

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