European Bond Research – August 14, 2020

UK ADDS FRANCE TO THE LIST OF TRAVELING BAN COUNTRIES. THAT PUT DOWNWARD PRESSURE ON AIRLINE, TRAVELING, AND HOSPITALITY  STOCKS MAKING EUROPE FINISHING IN THE RED FOR THE WEEK.  FTSE 100 -1.55%, German DAX -0.71%, CAC 40 -1.58%, STOXX Europe 600 -1.17%.  The 10-year Gilt was up  1.6 bps.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 21.2 MILLION+ CASES AND 760000+ DEATHS.  (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,  LYB International Finance BV (USD) 4.875% 3/15/2044 made some analysts ‘Conviction buy’ lists. (See the chart for  LYB International Finance BV bonds below). Pierre Robert

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.01% 0.21% 3.34% 8.72% 5.48% 12.13% Mining 0.17% 1.65% 4.22% 19.80% -1.04% 3.87% Manufacturing -0.09% -0.25% 1.51% 7.46% 0.56% 2.21% Transportion, Communication, Electric/Gas -0.11% -0.24% 0.95% 4.03% 3.12% 6.53% Wholesale -0.18% -0.46% 1.64% 4.56% 2.79% 7.12% Retail -1.32% 1.63% 7.25% 27.33% -19.12% -10.33% Finance, Insurance, Real-Estate 0.05% 0.34% 2.26% 8.45% 4.24% 9.63% Services -0.17% 0.50% 3.99% 11.11% 0.59% 6.49% Energy 0.59% -4.59% -9.91% 16.86% -23.95% -29.69%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 40.31, Belgium 15.52. Sovereign wideners (5Y):  Italy 143.55 and Greece 155.18

New Issues

New Issues [Continued]

1. Hemso Fastighets AB (SEK) 0.465% 8/21/2023 (08/13/2020): 500MM Senior Unsecured Notes, Price at Issuance 100, Yielding .47%. 2. DZ Bank AG (EUR) 0.01% 9/30/2022 (08/13/2020): 50MM Senior Preferred Security, Price at Issuance 100.55, Yielding -.25%. 3. Volvo Treasury AB (SEK) 0.948% 5/17/2023 (08/13/2020): 500MM Senior Unsecured Notes. 4. Volvo Treasury AB (SEK) FLT% 5/17/2023 (08/13/2020): 2000MM Senior Unsecured Notes. 5. UBS AG London (JPY) VAR% 8/25/2023 (08/14/2020): 5713MM Senior Unsecured Notes, Price at Issuance 100.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 08/14/2020, 133.39 NAV as of 08/14/2020, 99.47 Daily NAV Change (%) -0.12% Daily NAV Change (%) -0.5%

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 –0.433%, as of 08/13/2020.

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