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