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European Bond Research – January 31, 2020

Posted on January 31, 2020
January 31, 2020
Bond Markets

CORONA VIRUS SPREAD HAS TAKEN DOWN MARKETS WORLDWIDE. WORLD HEALTH ORGANIZATION HAS DECLARED A GLOBAL HEALTH CRISIS. FTSE 100 -1.31%, German DAX -1.11%, CAC 40 -1.01%, STOXX Europe 600 -0.92%.  The 10-year Gilt was down 1.7 basis points.

CHINA TO DATE HAS HAD 9700+ CASES AND 210+ DEATHS. INFECTION HAS SPREAD TO OVER 18 COUNTRIES WITH 110+ 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,  Telecom Italia Capital SA (USD) 6% 9/30/2034  made some analysts ‘Conviction buy’ lists. (See the chart for Telecom Italia Capital SA bonds below). Pierre Robert

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 44.45 and Greece 112.09. Sovereign wideners (5Y):  Finland 10.32 and Ireland 22.12.

New Issuance

New Issues New Issues [Continued]
1. Raiffeisenlandesbank Burgenland Und Revisionsverband (EUR) 0.279% 1/30/2027 (01/29/2020): 100MM Senior Unsecured Notes, Price at Issuance 100, Yielding .28%.

2. Raiffeisenlandesbank Burgenland Und Revisionsverband (EUR) 0.229% 1/30/2025 (01/29/2020): 100MM Unsecured Notes, Price at Issuance 100, Yielding .23%.

3. Raiffeisenlandesbank Burgenland Und Revisionsverband (EUR) FLT% 1/30/2030 (01/29/2020): 100MM Unsecured Notes, Price at Issuance 100.

ADI Indexes


iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 01/31/2020, 134.95 NAV as of 01/31/2020, 105.25
Daily NAV Change (%) +0.13% Daily NAV Change (%) -0.10%

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 ratecurrently 7.5% (seasonally adjusted, November 2019)
  • Eurostat’s quarterly GDP: 0.4% (2019 Q4)
  • 6-month Euribor: current value –0.337%, as of 01/30/2020

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