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European Bond Research – March 17, 2020

Posted on March 17, 2020
EUROPEAN BOND RESEARCH
March 17, 2020
Bond Markets

MARKETS BOUNCED BACK AS GOVERNMENTS PRESENT STIMULUS IDEAS AND PROPOSALS IN RESPONSE TO YESTERDAY’S PLUNGE.   FTSE 100 2.79%, German DAX +2.25%, CAC 40 +2.84%, STOXX Europe 600 +2.26%.  The 10-year Gilt was up 3.3 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 200000+ CASES AND 8000+ DEATHS. THE VIRUS SEEMS TO BE SLOWING DOWN IN CHINA AS NEW CASES AND DEATHS SEEM TO BE ACCELERATING INTERNATIONALLY.   (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,  Bombardier Inc. (USD) 7.5% 12/1/2024 Reg S made some analysts ‘Conviction buy’ lists. (See the chart for Bombardier Inc. bonds below). Pierre Robert

Industry Returns Tracker
Industry Past Day Past Week Past Month Past Quarter YTD Past Year
Agriculture, Forestry, Fishing -1.71% -9.63% -13.33% -11.84% -12.13% 1.64%
Mining -1.03% -5.10% -13.25% -11.18% -11.63% -1.17%
Construction -0.86% -4.67% -9.07% -5.41% -6.10% -0.48%
Manufacturing -2.01% -8.48% -10.24% -5.46% -6.18% -2.96%
Transportion, Communication, Electric/Gas -2.99% -6.05% -10.40% -8.49% -9.50% -0.83%
Wholesale -0.82% -3.83% -3.50% -1.40% -2.15% 10.95%
Retail -0.13% -2.54% 0.22% 6.44% 6.22% 24.34%
Finance, Insurance, Real-Estate -1.08% -4.92% -7.15% -4.12% -4.55% 5.90%
Services -2.26% -8.89% -12.26% -10.89% -11.44% -0.94%
Energy -1.78% -29.27% -33.69% -35.54% -35.13% -38.33%
 
Total returns (non-annualized) by rating, market weighted.
Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 74.11, Greece 398.155. Sovereign wideners (5Y):  Finland 20.20 and Ireland 55.9.

New Issuance

New Issues New Issues [Continued]
1. Citigroup Inc. (USD) 0% 3/30/2060 (03/16/2020): 80MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%.

2. Guanghui Investment Group (USD) 9.5% 9/23/2021 (03/17/2020): 58MM Senior Unsecured Notes.

ADI Indexes

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/17/2020, 123.17 NAV as of 03/17/2020, 82.85
Daily NAV Change (%) -0.87% Daily NAV Change (%) -1.2%

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 ratecurrently 7.5% (seasonally adjusted, November 2019)
  • Eurostat’s quarterly GDP: 0.4% (2019 Q4)
  • 6-month Euribor: current value –0.372%, as of 03/16/2020.

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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.

 


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