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