EUROPEAN INVESTMENT GRADE BONDS HELD AN EDGE against its high yielding counterparts in net prices linked to actual trades.  London housing prices continue to slump as Brexit uncertainty looms, prices are expected to further decline 2 percent in London this year in London.  Despite the concerns surrounding Brexit “The UK market has remained remarkably resilient”.  UK inflation rose slower than anticipated in April increasing 2.1 percent versus an expected rise of 2.2 percent.  The 10-year Gilt sank 6.7 basis points.  FTSE 100 +0.21%, German DAX +0.22%, CAC 40 -0.03%, STOXX Europe 600 -0.02%.

BRITISH STEEL COLLAPSES, forced into liquidation on Wednesday after failing to secure an emergency 30 million pound loan from the government. “The company in liquidation is continuing to trade and supply its customers while I consider options for the business. Staff have been paid and will continue to be employed.”  The failing company will leave 25,000 people out of work, 20,000 of which depend on its supply chain and are not directly employed by British Steel.  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, AstraZeneca PLC (USD) 3.5% 8/17/2023 made some analysts' 'Conviction Buy' lists. (See the chart for AstraZeneca PLC bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.644	1.652	-78.6
Belgium	10	0.423	0.385	-200.7
France	10	0.331	0.289	-209.9
Germany	10	-0.059	-0.101	-248.9
Italy	10	2.643	2.673		21.3
Japan	10	-0.045	-0.055	-247.4
Netherlands	10	0.136	0.086	-229.4
Portugal	10	1.031	1.056	-139.9
Spain	10	0.874	0.871	-155.6
Sweden	10	0.072	0.033	-235.8
U.K.	10	1.085	1.057	-134.5
U.S.	10	2.430	2.420	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): Ireland 32 bp and Germany 11 bp. Sovereign wideners (5Y): Finland 12 bp and France 29 bp.

New Issues	New Issues [Continued]
1. Vodafone Group PLC (EUR) 2.5% 5/24/2039 (05/21/2019): 750MM Senior Unsecured Notes, Price at Issuance 98.978, Yielding 2.566%. 2. HSBC Holdings PLC (GBP) 3% 5/29/2030 (05/21/2019): 750MM Senior Unsecured Notes, Price at Issuance 99.601, Yielding 3.047%.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/22/2019, 131.56	NAV as of 05/22/2019, 103.43
Daily NAV Change (%) -0.08%	Daily NAV Change (%) -0.12%

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 -0.244%, as of 05/21/2019

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