European Bond Research - July 22, 2019

Posted by Corey Mahoney on Jul 22, 2019 12:02:12 PM
EUROPEAN MARKETS INITIALLY EDGED HIGHER as investors await the critical European Central Bank policy meeting update on Thursday.  The central bank will disclose if they will cut the interest rate or wait until the next meeting in September.  Investors will focus on Mario Draghi and how dovish his remarks are gauging the state of the economy. “Largely European markets are lacking direction and probably shaping up for the ECB meeting this week.” FTSE 100 +0.04%, German DAX +0.22%, CAC 40+0.08%, STOXX Europe 600 +0.02%.  The 10-year Gilt dipped 1.4 basis points.  

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CRUDE OIL SPIKED ON MONDAY following Iran seizing a British oil tanker in the Persian Gulf, suspected retaliation from the British capturing an Iranian tanker two weeks prior. In a statement, British junior defense minister Tobias Ellwood reassured, “Our first and most important responsibility is to make sure we get a solution to the issue to do with the current ship, make sure other British-flagged ships are safe to operate in these waters and then look at the wider picture.”  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,  ArcelorMittal SA (USD) 6.75% 3/1/2041 made some analysts' 'Conviction Buy' lists. (See the chart for ArcelorMittal SA below). Corey Mahoney (


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Korea 31 bp and Spain 38bp. Sovereign wideners (5Y): Denmark 11 bp and Sweden 12 bp.

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New Issuance

New Issues New Issues [Continued]

1. Attica Hldg SA (EUR) 5% 7/26/2024 (07/22/2019): 175MM Unsecured Notes, Price at Issuance 100, Yielding 5%.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 07/22/2019, 134.24 NAV as of 07/22/2019, 105.06
Daily NAV Change (%) +0.04% Daily NAV Change (%) +0.06%

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 -0.354%, as of 07/19/2019

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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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