European Bond Research - August 30, 2019

Posted by Corey Mahoney on Aug 30, 2019 12:10:55 PM
EUROPEAN INVESTMENT GRADE BONDS SLIGHTLY EDGED OUT JUNK DEBT in net prices linked to actual trades. Easing trade tensions have boosted Europe’s major indices, The most important thing for markets right now is that China hasn’t escalated the trade war by retaliating against the latest U.S. tariffs” FTSE 100 +0.31%, German DAX +0.95%, CAC 40 +0.65%, STOXX Europe 600 +0.83%. The 10-year Gilt rose 9.5 basis points.

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ECONOMIC CONDITIONS SLUMPED IN THE EUROZONE as German retail sales fell at the fastest rate this year in July an indication consumer are closing their wallets. Despite the decline, retail sales are up 4.4 percent on a yearly basis. Inflation remained subdued at 1 percent in August well below the European Central Bank estimate of 2 percent. 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) 4% 1/17/2029 made some analysts' 'Conviction buy' lists. (See the chart for AstraZeneca PLC bonds below). Corey Mahoney


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 46 bp and Korea 33 bp. Sovereign wideners (5Y):  Finland 11 bp and France 20 bp.

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New Issuance

New Issues New Issues [Continued]

1. Vier Gas Transport Gmbh (EUR) 0.5% 9/10/2034 (08/29/2019):500MM Senior Unsecured Notes, Price at Issuance 98.485, Yielding .606%.

2. Nordea Bank AB (NOK) FLT% 9/5/2022 (08/29/2019): 500MM Senior Unsecured Notes.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 08/30/2019, 135.81 NAV as of 08/30/2019, 106.13
Daily NAV Change (%) +0.10% Daily NAV Change (%) +0.12%

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 -0.423%, as of 08/29/2019

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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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