European Bond Research – March 30, 2020

MARKETS UP AFTER A MOSTLY DOWN DAY DUE TO THE FEELING THAT SOME THE PANDEMIC MAY BE TOPPING OUT AND SLOWING DOWN IN TERMS OF NEW CASES. FTSE 100 +0.97%, German DAX +1.9%, CAC 40 +1.97%, STOXX Europe 600 +1.28%.  The 10-year Gilt was down 3.4 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 750000+ CASES AND 35000+ DEATHS. THE VIRUS SEEMS TO BE DOWN TO A TRICKLE 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 4.20% 8.65% -13.22% -12.63% -12.56% -1.01% Mining 1.36% -0.26% -23.21% -21.98% -22.03% -12.79% Construction 0.56% -3.40% -24.40% -23.22% -22.80% -18.88% Manufacturing 1.69% 2.99% -15.70% -11.56% -11.74% -7.29% Transportion, Communication, Electric/Gas 0.94% 7.11% -11.92% -11.98% -11.69% -2.43% Wholesale 0.10% -4.58% -15.21% -13.62% -13.53% -3.13% Retail 0.91% -1.70% -11.18% -3.96% -4.02% 10.89% Finance, Insurance, Real-Estate 0.33% 3.44% -11.21% -9.38% -9.37% 0.54% Services 3.13% 1.88% -16.87% -17.29% -17.37% -4.48% Energy -1.56% 3.21% -40.31% -42.11% -42.15% -46.18%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 59.39, Greece 167.29. Sovereign wideners (5Y):  Finland 10.83 and Ireland 43.64.

New Issues	New Issues [Continued]
1. Barclays Bank PLC (USD) 3% 3/31/2021 (03/30/2020): 525MM Unsecured Notes, Price at Issuance 100, Yielding 3%. 2. Electrolux AB (SEK) FLT% 4/6/2023 (03/30/2020): 1700MM Senior Unsecured Notes.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 03/30/2020, 126.07 NAV as of 03/30/2020, 87.0 Daily NAV Change (%) +0.44% Daily NAV Change (%) +0.81%

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 rate: EXPECTED TO SOAR.
• Eurostat’s quarterly GDP: EXPECTED TO CONTRACT.
• 6-month Euribor: current value –0.281%, as of 03/27/2020.

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