INVESTMENT GRAD EUROPEAN BONDS EDGED OUT HIGH YIELD DEBT in net prices linked to actual trades. European equities bounce back following optimism from the US saying a trade deal will eventually be achieved with China, “We'll let you know in about three or four weeks whether or not it was successful”. The 10-year Gilt rose 0.6 basis points.  FTSE 100 +1.09%, German DAX +0.97%, CAC 40 +1.50%, STOXX Europe 600 +1.01%.

EUROZONE INDUSTRIAL OUTPUT SANK 0.3 PERCENT IN MARCH for the second consecutive month. Output in France and Italy continued to decline meanwhile, in Germany output increased.  Antonio Patuelli was asked if FITD would rescue Carige he responded, “The ruling is not yet executive. Sixty days have not gone by yet from when it was notified. So this is a debate which has no legal basis”. BlackRock pulled out of a 720 million euro deal to rescue the failing bank supported by other Italian bank who agreed to take a 43 percent stake in the deal.  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, France Telecom (USD) 5.375% 1/13/2042 made some analysts' 'Conviction Buy' lists. (See the chart for France Telecom bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.731	1.740	-67.4
Belgium	10	0.430	0.437	-197.5
France	10	0.331	0.345	-207.4
Germany	10	-0.068	-0.042	-247.3
Italy	10	2.695	2.690		29.0
Japan	10	-0.046	-0.045	-245.1
Netherlands	10	0.118	0.142	-228.7
Portugal	10	1.152	1.115	-125.3
Spain	10	0.989	0.978	-141.6
Sweden	10	0.064	0.069	-234.1
U.K.	10	1.102	1.138	-130.3
U.S.	10	2.405	2.468	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): UK 28 bp and France28 bp. Sovereign wideners (5Y): China 51 bp and Ireland 32 bp.

New Issues	New Issues [Continued]
1. European Investment Bank (PLN) 2.875% 11/15/2029 (05/13/2019): 1000MM Senior Unsecured Notes, Price at Issuance 99.396, Yielding 2.94%. 2. Stockholm, City of (SEK) FLT% 5/21/2024 (05/14/2019): 1600MM Senior Unsecured Notes, Price at Issuance 103.604.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/14/2019, 131.59	NAV as of 05/14/2019, 103.08
Daily NAV Change (%) -0.02%	Daily NAV Change (%) +0.32%

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 -0.231%, as of 05/13/2019

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