European Bond Research – December 13, 2019

BORIS JOHNSON AND THE CONSERVATIVE PARTY WON A DECISIVE ELECTION OVER LABOR PARTY. With 356 seats out of 650 seats, Boris Johnson is now going to get BREXIT at the end of January 2020. FTSE 100 +1.11%, German DAX +.46%, CAC 40 +0.56%, STOXX Europe 600 +0.59%.  The 10-year Gilt lost 2.9 basis points.

MARKETS ARE CALM AND UNCHANGED AND WAITING TO SEE IF PHASE 1 OF THE US/CHINA TRADE DEAL ACTUALLY MATERIALIZES AND SEE WHAT IT ENTAILS. On Monday, the world will have more concrete details. (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,  Deutsche Bank AG (USD) 4.5% 4/1/2025  made some analysts ‘Conviction buy’ lists. (See the chart for Deutsche Bank AG bonds below). Pierre Robert

LATEST NEWS: Top moves, sovereign tighteners (5Y): Italy 125  and Spain 40.96. Sovereign wideners (5Y):  Finland 9.56 and Portugal 37.3.

New Issues	New Issues [Continued]
(None Current 12/13/2019)

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 12/13/2019, 134.51 NAV as of 12/13/2019, 105.23 Daily NAV Change (%) +0.22% Daily NAV Change (%) +0.27%

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: currently 7.5% (seasonally adjusted, May 2019)
• Eurostat’s quarterly GDP: 0.4% (2019 Q1)
• 6-month Euribor: current value –0.34%, as of 12/12/2019

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