European Bond Research - July 8, 2019

Posted by Anna Pickett on Jul 8, 2019 4:20:09 PM
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IRELAND IS UNER PRESSURE FROM EU MEMBER STATES to detail how it plans to keep its border with Northern Ireland open and remain a fully compliant member of the EU's single market as no-deal Brexit is on the horizon; Prime Minister Leo Varadkar says it would be difficult but possible. Philip Rycroft, who resigned as the permanent secretary of the Department for Exiting the European Union (DExEU), says everyone should be worried about a no-deal situation "because that is a very major change and it would be a very abrupt change to our major trading relationship."  

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DEUTSCHE BANK'S FAILED MERGER TALKS WITH COMMERZBANK back in April now has the company undergoing a mass restructing, which means slashing roughly 18,000 jobs and exiting the global equities business. Deutsche Bank's chief executive Christian Sewing described the organizational change as "painful but unavoidable to ensure Deutsche Bank's long-term success." This comes at the same time that easing tensions between the US and China are giving hope for the downward trending German economy, despite the lower than expected investor sentiment index. 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-yeild debt as of 3 PM, London time.  Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded,  Telecom Italia Capital SA (USD) 6% 9/30/2034 made some analysts' 'Conviction Buy' lists. (See the chart for Telecom Italia Capital SA below). Anna Pickett (

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Ireland 27 bp and Spain 37 bp. Sovereign wideners (5Y): Belgium 21 bp and France 23 bp.

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New Issuance

New Issues New Issues [Continued]

1. Volvo Treasury AB (USD) 2.959% 7/12/2019 (07/08/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.96%.

2. Bankhaus Carl Spaengler & Co. (EUR) 0.5% 8/5/2026 (07/08/2019): 250MM Senior Non Preferred 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 07/08/2019, 134.55 NAV as of 07/08/2019, 105.445
Daily NAV Change (%)    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 -0.344%, as of 07/05/2019

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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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