UK CONSTRUCTION ACTIVITY SUDDENLY CONTRACTED IN May to 48.6 falling short of expectations and Aprils record high of 50.5. “Commercial building remained hardest-hit by Brexit uncertainty, with construction firms reporting the steepest fall in this category of activity since September 2017.” Construction and engineering firms are taking a significant hit as Brexit uncertainties persist along with a weak economic outlook. The 10-year Gilt rose 3.9 basis points. FTSE 100 +0.38%, German DAX +1.53%, CAC 40 +0.54%, STOXX Europe 600 +0.58%.

EUROZONE UNEMPLOYMENT TICKED LOWER FALLING TO 7.6 PERCENT for the month of April, down from 7 percent one year ago.   Despite Italy’s 10.2 percent unemployment rate, the jobless rate breached 2008 lows.  French telecom giant Bouygues announced an rise of 14 percent in first-quarter profit as margins increase in the result of large infrastructure contracts.  Distressed Carige bank of Italy is struggling to any find interest in a merger or takeover as BPER Banca indicated conditions are not right.  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 bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.520	1.468	-56.1
Belgium	10	0.260	0.287	-182.0
France	10	0.204	0.211	-187.7
Germany	10	-0.199	-0.200	-228.0
Italy	10	2.578	2.658		49.7
Japan	10	-0.092	-0.097	-217.3
Netherlands	10	-0.009	-0.008	-208.9
Portugal	10	0.760	0.808	-132.1
Spain	10	0.697	0.715	-138.4
Sweden	10	-0.057	-0.031	-213.7
U.K.	10	0.864	0.888	-121.7
U.S.	10	2.081	2.130	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): France 30 bp and Spain 53 bp. Sovereign wideners (5Y): Denmark 11 bp and Italy 229 bp.

New Issues	New Issues [Continued]
1. Aroundtown SA (JPY) 1.42% 5/23/2029 (06/04/2019): 7000MM Senior Unsecured Notes, Price at Issuance 100, Yielding 1.42%.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 06/04/2019, 131.93	NAV as of 06/04/2019, 102.83
Daily NAV Change (%) +0.27%	Daily NAV Change (%) +0.37%

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 -0.254%, as of 06/03/2019

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