European Bond Research - June 28, 2019

Posted by Corey Mahoney on Jun 28, 2019 12:27:51 PM
CONSUMER CONFIDENCE IN THE UNITED KINGDOM SLIPPED in June to minus 13 from a reading of minus 10 in May. Analysts are calling this the new normal, "While UK consumers continue to remain concerned about the wider economy, over which the woman or man in the street has no control, of greater worry, are the falls in the measures for personal finance," FTSE 100 +0.13%, German DAX +1.06%, CAC 40 +0.83%, STOXX Europe 600 +0.63%. The 10-year Gilt rose 0.5 basis points.

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DEUTSCHE BANK REPORTEDLY SLASHING 20,000 JOBS over the next year-and-a-half accounting for more than a sixth of their workforce globally.  The bank announced it is “working on measures to accelerate its transformation” to stabilize and turn all divisions of bank profitable.  In 2018 the bank's global equity operations lost a staggering 750 million euros.  On Thursday, the US subsidiary of Deutsche passed the Federal Reserve stress test which last year it failed due to deficiencies in capital planning and risk controls. ADI (Advantage Data Inc.) extensive corporate-bond index data showed a net daily yield increment for high-yield versus high-grade 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,   Aon PLC (USD) 3.5% 6/14/2024 made some analysts' 'Conviction Buy' lists. (See the chart for Aon PLC below). Corey Mahoney (



Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 43 bp and Sweden 12 bp. Sovereign wideners (5Y): Denmark 11 bp and Korea 32 bp.

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New Issuance

New Issues New Issues [Continued]

1. Samhallsbyggnadsbolaget (SEK) FLT% 7/5/2021 (06/27/2019):300MM Senior Unsecured Notes, Price at Issuance 100.

2. Intesa Sanpaolo SPA (EUR) 1.75% 7/4/2029 (06/27/2019):1000MM Senior Preferred Security, Price at Issuance 99.266, Yielding 1.831%.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 06/28/2019, 133.94 NAV as of 06/28/2019, 105.14
Daily NAV Change (%) +0.06%  Daily NAV Change (%) +0.26%

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 -0.313%, as of 06/27/2019

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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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