GERMAN ECONOMIC CONFIDENCE SLUMPED to an eight-month low in July supporting the desire of the market for additional monetary stimulus. The country is typically a gauge of momentum for the bloc being its largest economy. German chemical giant Bayer received a boost advancing 1.7 percent following a U.S. judgment cutting damages awarded to an individual claiming Roundup caused his cancer. British pound declines to a 27-month low. FTSE 100 +0.71%, German DAX +0.55%, CAC 40 +0.80%, STOXX Europe 600 +0.47%. The 10-year Gilt gained 0.7 basis points.  

BRITISH WAGES GREW AT THE FASTEST RATE in nearly 11 years rising by 3.6 percent on an annual basis as unemployment remains at its lowest level since 1975.  “As more and more people have entered work, businesses have found it harder to fill vacancies, and skills shortages are now clearly evident across all sectors.”  Economists suspect the labor market to lose momentum as the new Brexit deadline of October 31^st approaches and employers become cautious potentially incurring layoffs. 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,  Altice Financing SA (USD) 7.5% 5/15/2026 Reg S made some analysts' 'Conviction Buy' lists. (See the chart for Altice Financing SA below). Corey Mahoney (cmahoney@advantagedata.com).

 

LATEST NEWS: Top moves, sovereign tighteners (5Y): Spain 38 bp and UK 29 bp. Sovereign wideners (5Y): France 22 bp and Korea 32 bp.

New Issues	New Issues [Continued]
1. GELF Bond Issuer I (EUR) 1.125% 7/18/2029 (07/15/2019):400MM Senior Unsecured Notes, Price at Issuance 99.475, Yielding 1.181%. 2. LB Baden-Wuerttemberg (EUR) 0.5% 7/16/2026 (07/15/2019):100MM Senior Non Preferred Notes, Price at Issuance 100.433.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 07/16/2019, 133.87	NAV as of 07/16/2019, 105.30
Daily NAV Change (%) +0.16%	Daily NAV Change (%) -0.07%

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 -0.343%, as of 07/15/2019

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