INFLOWS TO EUROPEAN FIXED INCOME ETFs significantly outweighed its equity counterparts in April, absorbing 4.3 billion euros accounting for 20.2 percent of inflows year-to-date.  Equities settled lower as trade fears were reignited and Brexit uncertainty looms,  FTSE 100 -0.56%, German DAX -1.51%, CAC 40 -1.43%, STOXX Europe 600 -1.03%. The 10-year Gilt gained 2.6 basis points.

DEUTSCHE BANK SHARES PLUMMET hitting a record low as UBS downgrades the German bank, shares settled nearly 3 percent lower.  USB expressed concerns with regards to the operating conditionsand the levered state of the bank.  Quarterly world trade growth remains at a nine-year low amid Brexit uncertainty and escalating tensions between the US and China.  The World Trade Organization stated, “The outlook for trade could worsen further if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances.”  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, Danone (USD) 2.947% 11/2/2026 Reg S made some analysts' 'Conviction Buy' lists. (See the chart for Danone bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.652	1.651	-74.6
Belgium	10	0.385	0.397	-201.3
France	10	0.289	0.295	-210.9
Germany	10	-0.101	-0.091	-249.9
Italy	10	2.673	2.687		27.5
Japan	10	-0.055	-0.060	-245.3
Netherlands	10	0.086	0.102	-231.2
Portugal	10	1.048	1.079	-135.0
Spain	10	0.871	0.904	-152.7
Sweden	10	0.033	0.035	-236.5
U.K.	10	1.036	1.075	-136.2
U.S.	10	2.398	2.392	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): UK 28 bp and France 28 bp. Sovereign wideners (5Y): Ireland 32 bp and Spain 55 bp.

New Issues	New Issues [Continued]
1. Banque Fed du Credit Mutuel (CHF) 0.2% 6/12/2026 (05/20/2019):125MM Senior Preferred Security, Price at Issuance 100.017, Yielding .2%. 2. NatWest Markets PLC (EUR) 1% 5/28/2024 (05/20/2019): 1000MM Senior Unsecured Notes.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/20/2019, 131.75	NAV as of 05/20/2019, 103.34
Daily NAV Change (%) -0.14%	Daily NAV Change (%) -0.17%

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 -0.240%, as of 05/17/2019

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