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