European Bond Research – December 21, 2020

GLOBAL MARKETS WERE DOWN AS A NEW STRAIN OF CORONA VIRUS IS BREAKING OUT IN THE UK CAUSING HUGE TRAVEL RESTRICTIONS. VACCINATION CONTINUES AND CONGRESS PASSED A $900 BILLION STIMULUS PACKAGE.  FTSE 100 -1.73%, German DAX -2.82%, CAC 40 -2.43%, STOXX Europe 600 -2.33%.  The 10-year Gilt was DOWN 4.3 bps.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 77.6 MILLION+ CASES AND 1.71 MILLION+ 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 -0.22% 0.03% 1.18% 2.47% 8.43% 8.69% Mining 0.04% 0.50% 4.34% 3.06% 3.75% 4.02% Manufacturing -0.03% 0.16% 1.51% 4.76% 5.95% 6.06% Transportion, Communication, Electric/Gas -0.15% -0.18% 0.24% 1.52% 4.57% 4.54% Wholesale 0.49% 1.18% 2.73% 4.50% 15.02% 14.73% Retail -0.51% -0.43% 5.23% 11.26% 5.29% 6.02% Finance, Insurance, Real-Estate -0.14% 0.20% 1.43% 4.08% 9.48% 9.93% Services -0.16% 0.31% 2.31% 5.07% 4.96% 5.48% Energy 0.50% 4.13% 18.57% 55.71% -8.04% -7.71%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 27.76 ,  Belgium 13.6. Sovereign wideners (5Y):  Italy 98.3 and Greece 101.90.

New Issues	New Issues [Continued]
(None Current 12/21/2020)

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 12/21/2020, 136.20 NAV as of 12/21/2020, 102.04 Daily NAV Change (%) +0.01% Daily NAV Change (%) +0.02%

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 –0.520%, as of 12/18/2020.

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