European Bond Research - September 4, 2019

Posted by Pierre Robert on Sep 4, 2019 12:16:29 PM
THREE EVENTS HELPED TURN markets and bond yields higher. The first was Boris Johnson losing a majority of parliament, possibly forcing an extension to Brexit and a deal. Hong Kong's tensions are lessened with the much lower possibility of Chinese intervention. China announced a stimulus program to stabilize its economy. FTSE 100 +0.44%, German DAX +0.89%, CAC 40 +1.1%, STOXX Europe 600 +0.82%. The 10-year Gilt gained 8.9 basis points.


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RENAULT LOST A TOP EXECUTIVE  due to the continued strife between Nissan and Renault. Those tensions threaten Nissan and Renault's alliance and make a merger with Fiat less likely. (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,  Renault SA (EUR) 2% 9/28/2026 made some analysts' 'Conviction buy' lists. (See the chart for Renault SA  bonds below). Pierre Robert


Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Korea 32.285 bp and Swedan 10.6 bp. Sovereign wideners (5Y): Denmark 10.14 bp and Italy 160.175 bp.

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New Issuance

New Issues New Issues [Continued]

1. Daimler Canada Finance (NOK) 2% 9/11/2023 (09/03/2019):1000MM Senior Unsecured Notes.

2. RTE Reseau de Transport d'Electricite SA (EUR) 0% 9/9/2027 (09/03/2019): 500MM Senior Unsecured Notes, Price at Issuance 99.093, Yielding .114%.


ADI Indexes

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iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 09/04/2019, 135.28 NAV as of 09/04/2019, 106.08
Daily NAV Change (%) -0.15% Daily NAV Change (%) +0.08%

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 -0.448%, as of 09/03/2019

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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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