European Bond Research – May 28, 2020

EUROPE’S MARKETS WERE NOTICIBLY HIGHER AS THE ECB PLEDGES 2 TRILLION EURO TO SUPPORT EUROPE’S MARKETS. OIL WAS LOWER AFTER YESTERDAY’S 5% DOWN ROUTE.  FTSE 100 +1.21%, German DAX +1.14%, CAC 40 +1.8%, STOXX Europe 600 +1.72%.  The 10-year Gilt was up 1.6 bps.

CORONA VIRUS UPDATE: CHINA TO DATE HAS HAD 5.8+ MILLION+ CASES AND 359000+ DEATHS. THE VIRUS SEEMS TO BE DOWN TO A TRICKLE IN CHINA AND EUROPE IS STARTING TO OPEN UP AS CASES START TO GET UNDER CONTROL.   (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,  Barclays PLC (USD) 5.25% 5/27/2023 made some analysts ‘Conviction buy’ lists. (See the chart for  Barclays PLC bonds below). Pierre Robert

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing 0.30% 0.35% 5.16% -1.87% -1.12% 11.32% Mining 0.26% 0.79% 14.36% -12.70% -11.16% -1.88% Manufacturing 0.34% 1.13% 2.58% -6.10% -3.05% 1.13% Transportion, Communication, Electric/Gas 0.13% 0.79% 2.58% 0.15% 0.62% 10.71% Wholesale 0.40% 0.59% 1.86% -6.23% -3.31% 7.16% Retail 0.83% 1.64% -5.76% -12.39% -4.93% 5.73% Finance, Insurance, Real-Estate 0.34% 0.83% 3.53% -2.61% -0.38% 9.59% Services 0.23% 1.88% 3.60% -4.34% -5.13% 4.18% Energy 1.82% 6.39% 20.67% -19.23% -27.50% -32.00%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 52.23, Belgium 33.31. Sovereign wideners (5Y):  Italy 196.23  and Greece 206.

New Issues

New Issues [Continued]

1. Banco Santander SA (EUR) 1.74% 6/3/2030 (05/27/2020): 100MM Senior Non Preferred Notes. 2. Societe Fonciere Lyonnaise SA (EUR) 1.5% 6/5/2027 (05/27/2020): 500MM Senior Unsecured Notes. 3. Danske Bank AS (NOK) FLT% 6/4/2026 (05/27/2020): 550MM Senior Non Preferred Notes, Price at Issuance 100. 4. Scania CV AB (EUR) 2.25% 6/3/2025 (05/27/2020): 500MM Senior Unsecured Notes. 5. Citigroup Global Markets (USD) 0% 6/10/2050 (05/27/2020): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 0%. 6. Siemens Financieringsmaatschappij NV (EUR) 0.25% 6/5/2024 (05/27/2020): 1000MM Senior Unsecured Notes, Price at Issuance 99.813, Yielding .297%. 7. Siemens Financieringsmaatschappij NV (EUR) 0.125% 6/5/2022 (05/27/2020): 1500MM Senior Unsecured Notes. 8. BNP Paribas (AUD) 2.518% 6/5/2025 (05/27/2020): 250MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 2.52%. 9. Intesa Sanpaolo SPA (EUR) FLT% 6/29/2027 (05/27/2020): 750MM Senior Non Preferred Notes, Price at Issuance 100. 10. Intesa Sanpaolo SPA (EUR) 3.75% 6/29/2027 (05/27/2020): 750MM Senior Non Preferred Notes, Price at Issuance 100, Yielding 3.75%.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 05/27/2020, 129.93 NAV as of 05/27/2020, 94.91 Daily NAV Change (%) +0.22% Daily NAV Change (%) +0.98%

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 –0.133%, as of 05/26/2020.

Copyright 2020 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com

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.

 

---