FACTORY ORDERS IN BRITAIN DRIFT LOWER IN JUNE as manufacturing output in the second quarter is on track for its weakest quarter in three years. Automakers suspended car production in anticipation of Brexit causing a disturbance late in the first quarter and production has still not picked up. Uncertainties continue to threaten the manufacturing industry domestically with Brexit and globally with trade disputes. Despite the slump, other sectors in the economy are performing. “The much larger services sector stands to benefit from robust growth in households’ disposable incomes”. 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, Telecom Italia Capital SA (USD) 6.375% 11/15/2033 made some analysts' 'Conviction Buy' lists. (See the chart for Telecom Italia Capital SA bonds below). Corey Mahoney (cmahoney@advantagedata.com).
Credit-Default Swap Market
New Issuance
| New Issues | New Issues [Continued] |
|---|---|
|
1. LGT Bank (CHF) 0.375% 7/5/2028 (06/18/2019): 150MM Senior Unsecured Notes, Price at Issuance 100.066, Yielding .37%. 2. Aroundtown SA (GBP) VAR% PERP (06/18/2019): 400MM Subordinated Notes, Price at Issuance 97.85, Yielding 5.25%. |
|
ADI Indexes
| iShares Core EUR UCITS | iShares Euro High Yield UCITS |
| NAV as of 06/19/2019, 133.56 | NAV as of 06/19/2019, 104.48 |
| Daily NAV Change (%) -0.04% | 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 7.7% (seasonally adjusted, March 2019)
- Eurostat's quarterly GDP: 0.4% (2019 Q1)
- 6-month Euribor: current value -0.276%, as of 06/18/2019
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