MANUFACTURING ACTIVITY CONTRACTED GLOBALLY in the month of May amid escalating global trade tensions and Britain’s delayed exit out of the European Union. The UK experienced a sharp decline in PMI, the index fell to 49.4 from 53.1. “New order inflows declined from both domestic and overseas markets, as already high stock levels at manufacturers and their clients led to difficulties in sustaining output levels and getting agreement on new contracts.” Conditions in the private sector remained weak and the Bank of England forecasts second-quarter growth to further deteriorate. 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-yield debt as of 3 PM, London time. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, AerCap Ireland Capital LTD (USD) 3.3% 1/23/2023 made some analysts' 'Conviction Buy' lists. (See the chart for AerCap Ireland Capital LTD bonds below). Corey Mahoney (cmahoney@advantagedata.com).
Sovereign-Debt Snapshot
| Country | Maturity (Y) | Yield (%) | Previous (%) | Spread (bp) | |
|---|---|---|---|---|---|
| Australia | 10 | 1.468 | 1.543 | -67.4 | |
| Belgium | 10 | 0.287 | 0.320 | -185.4 | |
| France | 10 | 0.211 | 0.242 | -193.0 | |
| Germany | 10 | -0.200 | -0.171 | -234.1 | |
| Italy | 10 | 2.658 | 2.651 | 51.7 | |
| Japan | 10 | -0.097 | -0.081 | -223.8 | |
| Netherlands | 10 | -0.008 | 0.022 | -214.9 | |
| Portugal | 10 | 0.808 | 0.862 | -133.3 | |
| Spain | 10 | 0.709 | 0.765 | -143.2 | |
| Sweden | 10 | -0.031 | 0.005 | -217.2 | |
| U.K. | 10 | 0.888 | 0.901 | -125.3 | |
| U.S. | 10 | 2.141 | 2.218 | ... | |
Credit-Default Swap Market
New Issuance
| New Issues | New Issues [Continued] |
|---|---|
|
(None Current 06/03/2019)
|
ADI Indexes
| iShares Core EUR UCITS | iShares Euro High Yield UCITS |
| NAV as of 06/03/2019, 131.61 | NAV as of 06/03/2019, 102.43 |
| Daily NAV Change (%) -0.05% | Daily NAV Change (%) -0.16% |
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 Preliminary)
- 6-month Euribor: current value -0.250%, as of 06/03/2019
Copyright 2019 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com
Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.