European Bond Research - July 30, 2019

Posted by Corey Mahoney on Aug 1, 2019 3:23:13 PM
EUROPEAN INVESTMENT GRADE BONDS ROSE against its high yield counterparts in net prices linked to actual trades. Euro zone economic sentiment further declined in July indicating a deteriorating economy supporting European Central Bank President Mario Draghi case for monetary easing. The pound dips to a 28-month low meanwhile the dollar held near two-month high. FTSE 100 -0.50%, German DAX -2.38%, CAC 40 -1.83%, STOXX Europe 600 -1.60%.  The 10-year Gilt lost 2.1 basis points. 

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BANKRUPTCIES IN THE UK HIT A FIVE-YEAR HIGH amid Brexit uncertainties causing increased financial stress on businesses.  A total of 4,321 companies entered insolvency during the second quarter of 2019, Today’s figures are evidence of a difficult period for UK businesses.”  Individual insolvency rates are also on the rise hitting a seven-year high of 26.2 per 10,000 adults. 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) 5.25% 8/5/2020  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): Spain 38 bp and France 20 bp. Sovereign wideners (5Y): China 40 bp and Ireland 29 bp.

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New Issuance

New Issues New Issues [Continued]

(None Current 07/30/2019)



ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 07/30/2019, 134.85 NAV as of 07/30/2019, 105.30
Daily NAV Change (%) -0.21% Daily NAV Change (%) -0.25%

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 -0.351%, as of 07/29/2019

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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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