GERMAN CHEMICAL GIANT BASF warned investors of a 30 percent profit cut citing a broad slowing market and the U.S. China trade war. BASF bonds traded slightly lower on the weak outlook and the stock plummeted 5.8 percent. The chemical company supplies thousands of manufactures globally across an array of industries ranging from auto manufacturing to consumer products and technology chip makers raising concerns about the global economy. Automotive manufacturer BMW announced plans to further mitigate Brexit risk by transferring engine production out of the UK in order to comply with trade regulations. ADI (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily yield increment for high-grade versus high-yield 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, Petrobras Global Finance BV (USD) 8.75% 5/23/2026 made some analysts' 'Conviction Buy' lists. (See the chart for Petrobras Global Finance BV below). Corey Mahoney (cmahoney@
Credit-Default Swap Market
|New Issues||New Issues [Continued]|
1. Prospect Capital Corp. (USD) 5% 7/15/2026 (07/08/2019): 0MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5%.
2. Volvo Treasury AB (USD) 2.959% 7/12/2019 (07/08/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.96%.
|iShares Core EUR UCITS||iShares Euro High Yield UCITS|
|NAV as of 07/09/2019, 134.36||NAV as of 07/09/2019, 105.32|
|Daily NAV Change (-0.14%)||Daily NAV Change (%) -0.12%|
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, May2019)
- Eurostat's quarterly GDP: 0.4% (2019 Q1)
- 6-month Euribor: current value -0.348%, as of 07/08/2019
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