European Bond Research – February 10, 2020

EUROPEAN MARKETS ARE DOWN AGAIN ON CORONAVIRUS SCARE. DEAL BETWEEN EU AND UK VASCILATES BETWEEN HAPPENING BY YEAR-END OR NOT.   FTSE 100 +0.26, German DAX -0.15%, CAC 40 -0.23%, STOXX Europe 600 +0.07%.  The 10-year Gilt was down 1.4 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 40000+ CASES AND 900+ DEATHS. INFECTION HAS SPREAD TO OVER 25 COUNTRIES WITH 800+ CONFIRMED CASES. (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,  Intelsat Luxembourg SA (USD) 7.75% 6/1/2021 made some analysts ‘Conviction buy’ lists. (See the chart for Intelsat bonds below). Pierre Robert

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 36.60, Greece 100.46. Sovereign wideners (5Y):  Finland 10.24 and Ireland 22.04.

New Issues	New Issues [Continued]
(None Current 02/10/2020)

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 02/10/2020, 134.98 NAV as of 02/10/2020, 105.79 Daily NAV Change (%) +.22% Daily NAV Change (%) +0.14%

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, November 2019)
• Eurostat’s quarterly GDP: 0.4% (2019 Q4)
• 6-month Euribor: current value –0.339%, as of 02/07/2020.

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