EUROPEAN SHARES SLIPPED UPON A SPARK in geopolitical risk as the U.S. affirmed a rise in tariffs on China claiming a slowdown in trade talks.  Automakers BMW, Daimler, and Volkswagen took a significant hit losing between 2 and 3 percent following the escalation of trade tensions. German DAX -1.38%, CAC 40 -1.43%, STOXX Europe 600 -1.09%.

EUROZONE SERVICES PMI RECEDED to 52.8 in April, however a favorable improvement from preliminary estimates of 52.5.  “The survey is indicative of the economy growing at a quarterly rate of approximately 0.2 percent, but manufacturing remained mired in its steepest downturn since 2013 and service sector growth slipped lower”.  Italian banks agreed to take a 43 percent stake in the faltering Carige bank supporting BlackRock’s 720 million euro lifeline allowing the bank to stay afloat.  The European Central Bank appointed a special administration for the bank back in January to prevent an all-out collapse.  In addition, back in November, Italian banks bought 320 million euros in hybrid bonds issued by Carige to back the wavering bank.  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,   Actavis Funding SCS (USD) 3.45% 3/15/2022 made some analysts' 'Conviction Buy' lists. (See the chart for Actavis Funding SCS bonds below). Corey Mahoney (cmahoney@advantagedata.com).

Country	Maturity (Y)	Yield (%)	Previous (%)	Spread (bp)
Australia	10	1.801	1.797	-72.5
Belgium	10	0.458	0.466	-206.8
France	10	0.370	0.374	-215.6
Germany	10	0.028	0.032	-249.8
Italy	10	2.553	2.554		2.7
Japan	10	-0.029	-0.029	-255.5
Netherlands	10	0.194	0.201	-233.2
Portugal	10	1.122	1.113	-140.5
Spain	10	0.979	0.992	-154.7
Sweden	10	0.181	0.155	-234.5
U.K.	10	1.221	1.189	-130.5
U.S.	10	2.526	2.543	...

LATEST NEWS: Top moves, sovereign tighteners (5Y): France 26 bp and Spain 53 bp. Sovereign wideners (5Y): China 40 bp and Ireland 30 bp.

New Issues	New Issues [Continued]
(None Current 05/06/2019)

DATA CHECK:

iShares Core EUR UCITS	iShares Euro High Yield UCITS
NAV as of 05/06/2019, 132.08	NAV as of 05/06/2019, 103.97
Daily NAV Change (%) +0.02%	Daily NAV Change (%) -0.06%

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 -0.230%, as of 05/03/2019

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