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European Bond Research – March 2, 2020

Posted on March 2, 2020
EUROPEAN BOND RESEARCH
March 2, 2020
Bond Markets

EUROPEAN MARKETS AND US MARKETS WERE MIXED EARLY. LATER IN THE DAY MARKETS LAUNCHED UP TO 4-5 %.   FTSE 100 +1.10%, German DAX +1.17%, CAC 40 -0.44%, STOXX Europe 600 -0.71%.  The 10-year Gilt was down 5.1bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 90000+ CASES AND 3200+ DEATHS. THE VIRUS SEEMS TO BE SLOWING DOWN 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

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 45.35, Greece 140.93. Sovereign wideners (5Y):  Finland 9.97 and Ireland 20.99.

New Issuance

New Issues New Issues [Continued]

(None Current 03/02/2020)
ADI Indexes

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/02/2020, 134.12 NAV as of 03/02/2020, 102.61
Daily NAV Change (%) +0.41% Daily NAV Change (%) +0.1%

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 –0.386%, as of 02/28/2020.

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