Grid IconAll Posts Market Summaries

European Bond Research – March 15, 2019

Posted on March 15, 2019
BRITAIN’S ECONOMY CAME CLOSE TO STAGNATING in February amid Brexit nerves and “sluggish” global growth. Earlier this month, the ECB offered banks a new round of cheap loans to help revive the Eurozone economy. Norway’s central bank is expected to raise its key rate on March 21 and will continue to tighten later this year due to rising inflation and solid growth. Norway’s 2018 Q4 growth exceeded expectations and higher demand in crude oil prices point to a justification for tighter policy. The UK 10-year Gilt declined one basis point. FTSE 100, +0.50%, STOXX Europe 600 +0.63%, CAC 40 +0.63%, German DAX +0.18%.

HONDA ANNOUNCED, “ANY BREXIT DEAL must be long enough to sustain stability.” Honda retains 10 percent of the market share of cars in Britain, they have declared closing its factory due to Brexit uncertainty. Honda, BMW, and Rolls-Royce brands account for 55 percent of UK car output, all plan to shut their factories in April. “The BMW group wants to achieve security on operations and revenue.” Honda stated they are relying on the government to deliver a “clear, legally certain, path forward to avoid no deal.”ADI (Advantage Data Inc.) corporate-bond index data showed a net daily yield increment for high-grade versus high-yield constituents. High-grade bonds edged out high-yield debt as of 3 PM, London time. Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, Royal Bank of Scotland Group PLC (USD) 6.1% 6/10/2023 made some analysts’ ‘Conviction Buy’ lists. (See the chart for Royal Bank of Scotland Group Bonds below). Niral Mehta (

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.984 1.968 -64.1
Belgium 10 0.541 0.536 -208.4
France 10 0.473 0.470 -215.2
Germany 10 0.089 0.066 -253.6
Italy 10 2.500 2.559 -12.5
Japan 10 -0.041 -0.046 -266.6
Netherlands 10 0.175 0.156 -245.0
Portugal 10 1.329 1.341 -129.6
Spain 10 1.195 1.198 -143.0
Sweden 10 0.307 0.291 -231.8
U.K. 10 1.225 1.199 -140.0
U.S. 10 2.625 2.621

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Dubai 123 bp and Belgium 23 bp. Sovereign wideners (5Y): China 46 bp and Portugal 67 bp.

New Issuance

New Issues New Issues [Continued]
1. Erdoel Lagergesellschaft (EUR) 0.834% 3/21/2029 (03/14/2019):75MM Senior Unsecured Notes.

2. Hypo Vorarlberg Bank AG (EUR) 0.295% 3/22/2022 (03/14/2019):50MM Senior Unsecured Notes, Price at Issuance 100, Yielding .3%.

3. Just Group LTD (GBP) 9.375% PERP (03/14/2019): 300MM Junior Subordinated Notes.

ADI Indexes


iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/15/2019, 130.44 NAV as of 03/15/2019, 102.92
Daily NAV Change (%) +0.05% Daily NAV Change (%) +0.00%

The euro-zone economy shows signs of positive momentum, although conditions are expected to deteriorate hindered by the termination of quantitative easing, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:

  • Eurostat’s unemployment ratecurrently 7.8% (seasonally adjusted, January 2019)
  • Eurostat’s quarterly GDP: 0.2% (2018 Q3 Final)
  • 6-month Euribor: current value –0.232%, as of 03/14/2019

Copyright 2019 Advantage Data Inc. All Rights Reserved.

Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 300,000+ BDC fair value assessments dating back to 2000
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 15 products and services from debt to loans to mid-market
  • Used by top buy and sell-side firms worldwide


facebook share icon twitter share icon linkedin share icon
Ready to get Started? Free Trial