EUROZONE TRADE SURPLUS with the US contracted in March, meanwhile widened with China. The trade surplus on a seasonally adjusted basis decreased to 17.9 billion euros in March from 20.6 billion February. Equities settled higher upon easing fears regarding a trade war, FTSE 100 +0.50%, German DAX +1.51%, CAC 40 +1.08%, STOXX Europe 600 +1.06%. The 10-year Gilt dipped 0.5 basis points.

FRENCH UNEMPLOYMENT DROPPED in the first quarter to the lowest level in a decade receding to 8.7 percent.  Sound improvement has pushed employment to its highest level since 1980; President Emmanuel Macron set a goal of 7 percent unemployment by 2020.  EU fined five banks 107 billion euros for manipulating foreign currency markets, among the banks Barclays, Citigroup and JP Morgan. “These cartel decisions send a clear message that the Commission will not tolerate collusive behavior in any sector of the financial markets”.  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, Telecom Italia Capital SA (USD) 6.375% 11/15/2033
 made some analysts' 'Conviction Buy' lists. (See the chart for Telecom Italia Capital SA bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.711	1.731	-71.0
Belgium	10	0.431	0.430	-199.0
France	10	0.333	0.331	-208.8
Germany	10	-0.067	-0.068	-248.8
Italy	10	2.735	2.695		31.4
Japan	10	-0.051	-0.046	-247.2
Netherlands	10	0.130	0.118	-229.1
Portugal	10	1.136	1.152	-128.5
Spain	10	0.971	0.989	-145.0
Sweden	10	0.057	0.064	-236.4
U.K.	10	1.107	1.102	-131.4
U.S.	10	2.421	2.408	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): Spain 58 bp and France 29 bp. Sovereign wideners (5Y): Denmark 11 bp and UK 29 bp.

New Issues	New Issues [Continued]
1. Standard Chartered PLC (USD) 0% 6/4/2049 (05/14/2019): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%. 2. Fidelity National Info Services Inc (EUR) 0.125% 5/21/2021 (05/14/2019): 500MM Senior Unsecured Notes, Price at Issuance 99.896, Yielding .177%.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/16/2019, 131.91	NAV as of 05/16/2019, 103.38
Daily NAV Change (%) +0.12%	Daily NAV Change (%) +0.31%

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 -0.232%, as of 05/15/2019

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