NEARLY HALF OF EURO GOVERNMENT DEBT is yielding less than zero percent, the Netherlands is the latest country to see negative yields. The proportion of negative yielding debt hit its highest level since September 2016 tallying $3.71 trillion euros or 48 percent. Elevated trade tensions, Brexit uncertainty, and fears over Italy’s budget resulted in the accelerating trend. The 10-year Gilt fell 2.1 basis points.  FTSE 100 -0.91%, German DAX -1.58%, CAC 40 -1.14%, STOXX Europe 600 -1.05%.

RETAIL SALES IN GERMANY BOUNCED BACK in April growing 4 percent year-over-year exceeding expectations reversing a 2 percent decline in March.  Easter had a "positive effect" and clothing exports were able to "compensate for the slight decline in domestic retail sales through strong exports."  UK house prices increased at a slower pace in May than previously forecasted growing by 0.6 percent year-over-year dropping 0.2 percent from last month.  Brexit continues to hinder the housing market, "The trend likely won’t improve in the next couple of months, given the political deadlock in Westminster." 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, Lloyds Banking Group PLC (USD) 4.55% 8/16/2028 made some analysts' 'Conviction Buy' lists. (See the chart for Lloyds Banking Group PLC bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.543	1.493	-68.1
Belgium	10	0.320	0.318	-190.3
France	10	0.242	0.232	-198.2
Germany	10	-0.171	-0.175	-239.5
Italy	10	2.651	2.647		42.7
Japan	10	-0.081	-0.093	-230.5
Netherlands	10	0.022	0.019	-220.2
Portugal	10	0.862	0.850	-136.2
Spain	10	0.765	0.739	-145.9
Sweden	10	0.005	0.005	-221.9
U.K.	10	0.901	0.896	-132.3
U.S.	10	2.224	2.264	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): Germany 11 bp and UK 30 bp. Sovereign wideners (5Y): Finland 12 bp and Sweden 11 bp.

New Issues	New Issues [Continued]
1. Nordea Bank AB (USD) 2.815% 6/7/2024 (05/31/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 2.82%. 2. OP Corporate Bank (USD) FLT% 6/5/2020 (05/31/2019): 200MM Senior Unsecured Notes.

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/31/2019, 131.71	NAV as of 05/31/2019, 102.55
Daily NAV Change (%) +0.11%	Daily NAV Change (%) -0.33%

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 -0.247%, as of 05/30/2019

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.