European Bond Research – January 13, 2021

GLOBAL MARKETS WERE MIXED TO HIGHER AS DEMOCRATS AND SOME REPUBLICANS SETUP A VOTE TO IMPEACH PRESIDENT TRUMP. COVID-19 DEATHS ARE TOPPING 10K WORLDWIDE AND 4K+ IN THE US. FTSE 100 -0.13%, German DAX +0.11%, CAC 40 +0.21%, STOXX Europe 600 +0.11%.  The 10-year Gilt was -4.5 bps. 

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 92.5 MILLION+ CASES AND 1.98 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 -0.08% 0.19% 0.02% 2.84% 0.38% 7.80% Mining -0.25% 1.83% 6.38% 5.62% 1.82% 5.26% Manufacturing -0.09% 0.00% 0.26% 2.42% 0.08% 5.69% Transportion, Communication, Electric/Gas -0.14% -0.78% 0.23% 1.53% 0.04% 4.95% Wholesale -1.55% -0.14% 0.62% 4.71% -0.05% 14.53% Retail 0.41% -0.04% 1.45% 12.35% 0.27% 6.44% Finance, Insurance, Real-Estate -0.14% 0.04% 0.95% 4.72% 0.12% 9.38% Services -0.11% -0.15% 1.31% 5.96% -0.09% 5.62% Energy 0.96% 2.34% 9.52% 62.55% 3.07% -4.61%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 30.64,  Belgium 13.5. Sovereign wideners (5Y):  Italy 98.1 and Greece 97.1.

New Issues

New Issues [Continued]

1. Caisse Des Depots et Consignations (CHF) 0% 6/26/2028 (01/12/2021): 100MM Senior Unsecured Notes, Price at Issuance 102.142, Yielding -.28%. 2. BNP Paribas (EUR) VAR% 1/19/2030 (01/12/2021): 1000MM Senior Non Preferred Notes. 3. Autostrade per l’Italia SpA (EUR) 2% 1/15/2030 (01/12/2021): 1000MM Senior Unsecured Notes. 4. BNP Paribas (EUR) 0% 1/19/2024 (01/12/2021): 170MM Senior Preferred Security. 5. BNP Paribas (EUR) 0% 1/12/2024 (01/12/2021): 120MM Senior Preferred Security. 6. Motability Operations Group PLC (EUR) 0.125% 7/20/2028 (01/13/2021): 500MM Senior Unsecured Notes. 7. BNG Bank NV (EUR) 0% 1/20/2031 (01/13/2021): 1000MM Senior Unsecured Notes. 8. Motability Operations Group PLC (GBP) 1.5% 1/20/2041 (01/13/2021): 350MM Senior Unsecured Notes. 9. Scania CV AB (SEK) FLT% 1/20/2025 (01/13/2021): 650MM Senior Unsecured Notes. 10. Dexia Credit Local (EUR) 0% 1/21/2028 (01/13/2021): 1500MM Senior Unsecured Notes.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 01/13/2021, 136.01 NAV as of 01/13/2021, 102.39 Daily NAV Change (%) -0.26% Daily NAV Change (%) -0.08%

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 -0.530%, as of 1/12/2021.

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