European Bond Research - July 5, 2019

Posted by Anna Pickett on Jul 5, 2019 12:10:00 PM
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THE CONTINUED BREXIT CRISIS CAUSES A UK ECONOMY SLOWDOWN as British employers and shoppers are growing increasingly cautious. Although the unemployment rate fell to its lowest rate since 1975 at 3.8% in the first quarter of 2019, The Bank of England said Britain's economy had nearly no growth in the April to June period. The Bank of England Governor Mark Carney suggests the no-deal Brexit and the rise in protectionist trade policies pose great risk to the British economy.

unnamed - 2019-06-27T120443.580

HEAD OF DEUTSCHE BANK, GARTH RITCHIE, AGREED TO STEP DOWN on Friday as Germany's largest lender prepares a multi-billion dollar restructuring. Chief Executive Christian Sewing will represent the investment bank on Deutsche Bank's board following the departure. Meanwhile, six major banks of the Nordic region announced the creation of a customer checking centre as an effort to crack down onmoney launderers as this has become a high profile issue. The revamped version of the Euribor interest rate benchmark has been approved in an effort for the euro to catch up with reforms aimed to protect against another global rate-rigging scandal. ADI (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily yield increment for high-yield versus high-grade constituents. High-yield bonds edged out high-grade debt as of 3 PM, London time.  Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,  Fiat Chrysler Automobiles NV (USD) 5.25% 4/15/2023 made some analysts' 'Conviction Buy' lists. (See the chart for Fiat Chrysler Automobiles NV below). Anna Pickett (

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): UK 31 bp and Germany 11 bp. Sovereign wideners (5Y): Italy 167 bp and Spain 36 bp.

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New Issuance

New Issues New Issues [Continued]

1. Eiffage SA (EUR) FLT% 7/9/2021 (07/05/2019): 50MM Senior Unsecured Notes, Price at Issuance 100.

2. Marks & Spencer Group PLC (GBP) 3.25% 7/10/2027 (07/05/2019): 250MM Senior Unsecured Notes.

3. Schneider Electric (EUR) 0.25% 9/9/2024 (07/05/2019): 200MM Senior Unsecured Notes.


ADI Indexes

unnamed - 2019-07-08T161746.062

iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 07/05/2019, 134.46 NAV as of 07/05/2019, 105.6
Daily NAV Change (%) -0.21%  Daily NAV Change (%) -0.09%

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 7.7% (seasonally adjusted, March 2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value -0.338%, as of 07/04/2019

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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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