Grid IconAll Posts Market Summaries

European Bond Research – March 26, 2019

Posted on March 26, 2019
UK BANKS APPROVE FEWEST MORTGAGES IN SIX YEARS as Brexit nears. Seasonally-adjusted data from the UK Finance industry “resonated” with banks approving a lean 35,200 mortgages last month, the smallest number since April 2013. Overall consumer credit growth also decelerated only rising 3.8 percent in February compared to an expected 4.5% increase. After a few years of “ultra-easy monetary policy,” including negative interest rates and an unprecedented 2.6 trillion euro asset purchase program, economic growth is weakening again. Inflation is below 2 percent and Germany’s 10-year bond yield has dropped back under zero, signaling a recession fear. German consumer morale deteriorated heading into April, suggesting that household spending might weaken in the second quarter.  The UK 10-year Gilt increased two basis points. FTSE 100, +0.39%, STOXX Europe 600 +0.76%, CAC 40 +0.88%, German DAX +0.62%.

NO DEAL BREXIT WILL NOT DISRUPT GAS AND POWER flows from Europe.  “We anticipate no additional operability challenges for this summer as a result of the UK’s planned exit from the EU,” National Grid said in its Summer outlook.  British “imports around 5-6 percent of its electricity via interconnectors with continental Europe.”  Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded, Barclays PLC (USD) 3.684% 1/10/2023 made some analysts’ ‘Conviction Buy’ lists. (See the chart for Barclays PLC bonds below). Niral Mehta (

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.791 1.844 -62.2
Belgium 10 0.441 0.430 -197.2
France 10 0.358 0.345 -205.5
Germany 10 -0.026 -0.011 -243.9
Italy 10 2.509 2.450 9.6
Japan 10 -0.084 -0.073 -249.7
Netherlands 10 0.070 0.071 -234.4
Portugal 10 1.288 1.260 -112.6
Spain 10 1.106 1.071 -130.8
Sweden 10 0.238 0.212 -217.5
U.K. 10 0.988 1.016 -142.6
U.S. 10 2.413 2.442

Credit-Default Swap Market

LATEST NEWS: Top moves, sovereign tighteners (5Y): Belgium 25 bp and Dubai 126 bp. Sovereign wideners (5Y): Denmark 11 bp and Greece 363 bp.

New Issuance

New Issues New Issues [Continued]
1. Erste Group Bank AG (EUR) 0.5% 3/26/2026 (03/25/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding .5%.

2. Arla Foods Finance AS (SEK) FLT% 4/3/2024 (03/25/2019):750MM Senior Unsecured Notes, Price at Issuance 100.

3. Banque Cantonale de Geneve (CHF) 0.125% 4/23/2026 (03/25/2019): 120MM Senior Unsecured Notes, Price at Issuance 100.419, Yielding .07%.

ADI Indexes


iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 03/26/2019, 130.71 NAV as of 03/26/2019, 102.91
Daily NAV Change (%) +0.03% Daily NAV Change (%) +0.30%

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 –0.228%, as of 03/25/2019

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