European Bond Research – April 20, 2020

EUROPE’S MARKETS ARE UP AS GERMANY TAKES THE FIRST STEPS TO OPEN UP. COVID-19 CASES AND DEATHS ARE GOING DOWN THROUGHOUT EUROPE. OIL CRASHES TO ZERO! FTSE 100 +0.45%, German DAX +0.47%, CAC 40 +0.65%, STOXX Europe 600 +0.67%.  The 10-year Gilt was up 3.3 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 2.5 MILLION+ CASES AND 170000+ DEATHS. THE VIRUS SEEMS TO BE DOWN TO A TRICKLE IN CHINA AS NEW CASES AND DEATHS SEEM TO BE ACCELERATING INTERNATIONALLY.   (Advantage Data Inc.). Extensive corporate-bond index data showed a net daily grade increment for high-grade versus high-yield constituents. High-yield bonds edged out high-grade debt as of 3 PM, London time.  Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,  Mylan Inc. (USD) 3.75% 12/15/2020 made some analysts ‘Conviction buy’ lists. (See the chart for  Mylan Inc. bonds below). Pierre Robert

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.36% 5.45% 12.67% -5.92% -4.91% 7.41% Mining -0.00% 1.60% -5.33% -16.99% -15.63% -8.63% Construction 0.54% 9.55% -6.81% -13.31% -12.01% -9.20% Manufacturing 0.33% 3.09% 3.52% -5.83% -3.52% -0.26% Transportion, Communication, Electric/Gas 1.30% 0.44% 2.89% -7.72% -6.90% 1.24% Wholesale -0.19% 0.33% -5.90% -9.60% -9.09% 0.48% Retail 1.05% 3.76% -2.96% -1.62% 1.29% 14.94% Finance, Insurance, Real-Estate 0.05% 2.37% 0.56% -6.39% -5.25% 4.31% Services 1.39% 6.51% 8.43% -6.89% -6.45% 2.36% Energy -0.77% -4.39% -10.91% -47.57% -45.53% -48.04%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 46.48, Greece 173.31. Sovereign wideners (5Y):  Finland 10.83 and Ireland 22.72.

New Issues	New Issues [Continued]
1. ABN AMRO Bank NV (EUR) 0.3% 4/20/2026 Reg S (04/19/2020): 6000MM . 2. ABN AMRO Bank NV (EUR) 0.5% 4/20/2029 Reg S (04/19/2020): 6000MM .

6DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 04/20/2020, 128.07 NAV as of 04/20/2020, 92.45 Daily NAV Change (%) -0.16% Daily NAV Change (%) -0.45%

OVERALL EUROPEAN CREDIT MARKET:
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 rate: EXPECTED TO SOAR.
• Eurostat’s quarterly GDP: EXPECTED TO CONTRACT.
• 6-month Euribor: current value –0.195%, as of 04/17/2020.

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