EUROPEAN CENTRAL BANK IS EXPECTED TO SIGNAL toward an easier monetary policy as the gloabl march toward lower interest rates reaches Europe, caused in part by the slowed global growth and increased protectionism. Deutsche Bank's planned sale of its prime brokerage unit to BNP Paribas is still in a preliminary stage as both parties are keeping an eye on hedge fund withdrawals. Since Deutsche Bank's restructuring declaration, hedge fund clients have pulled about $1B in assets per day since the July 7th announcement. 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, Aon PLC (USD) 4.45% 5/24/2043 made some analysts' 'Conviction Buy' lists. (See the chart for Aon PLC below). Anna Pickett (apickett@
Credit-Default Swap Market
|New Issues||New Issues [Continued]|
1. Tesco Personal Finance (GBP) 3.5% 7/25/2025 (07/19/2019):250MM Senior Unsecured Notes.
2. JPMorgan Chase & Co. (EUR) 1.001% 7/25/2031 (07/19/2019):1500MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1%.
3. Efacec Capital SGPS SA (EUR) 4.5% 7/23/2024 (07/19/2019):58MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4.5%.
|iShares Core EUR UCITS||iShares Euro High Yield UCITS|
|NAV as of 07/19/2019, 134.15||NAV as of 07/19/2019, 105.01|
|Daily NAV Change (%) +0.15%||Daily NAV Change (%) +0.18%|
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 -0.353%, as of 07/18/2019
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