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).
Sovereign-Debt Snapshot
| 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 | ... | |
Credit-Default Swap Market
New Issuance
| 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. |
ADI Indexes
| 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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