European Bond Research - August 28, 2019

Posted by Corey Mahoney on Aug 28, 2019 12:17:45 PM
EUROPEAN INVESTMENT GRADE DEBT ROSE AGAINST its high yield counterparts in net prices linked to actual trades. German consumer confidence slipped in August to 135.1 from 135.8 marking the lowest reading in six-and-a-half years as economic expectations in the country are suffering “significant losses”. FTSE 100 +0.12%, German DAX -0.78%, CAC 40 -0.75%, STOXX Europe 600 -0.58%.  The 10-year Gilt lost 4.7 basis points.

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BRITAIN’S QUEEN ELIZABETH approved a request to suspend parliament by Prime Minister Boris Johnson until October 14th, two weeks prior to the Brexit deadline leaving the opposition little to no time to act.   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,  Coca-Cola European Partners PLC (USD) 4.5% 9/1/2021 made some analysts' 'Conviction buy' lists. (See the chart for Coca-Cola European Partners PLC bonds below). Corey Mahoney


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Korea 33 bp and France 21 bp. Sovereign wideners (5Y):  Germany 10 bp and UK 33 bp.

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New Issuance

New Issues New Issues [Continued]

1. Hella GmbH & Co. Kgaa (EUR) 0.5% 1/26/2027 (08/27/2019):500MM Senior Unsecured Notes, Price at Issuance 99.928, Yielding .51%.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 08/28/2019, 135.7 NAV as of 08/28/2019, 105.74
Daily NAV Change (%) -.01% Daily NAV Change (%) +.02%

The euro-zone economy shows signs of negative momentum, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment ratecurrently 7.5% (seasonally adjusted, May 2019)
  • Eurostat's quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value -0.415%, as of 08/27/2019

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Topics: High Yield, Investment Grade, Loans, Analytics, bonds, junk bonds, bond market, market analytics, New Issues, Finance, Fixed Income, News, Syndicated Bonds, syndicated, research, market update

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