European Bond Research – November 1, 2019

EUROPEAN STOCKS WERE UP TODAY amid the Brexit stalemate. All parties are mobilizing for the December vote. All are putting their agenda forward. FTSE 100 +0.55%, German DAX +0.81%, CAC 40 +0.67%, STOXX Europe 600 -+0.70%.  The 10-year Gilt Rose 1.3 basis points.

SOVEREIGN BONDS WERE HIGHER. Stocks and bond yields were higher in the hopes trade tension would be abating. (Advantage Data Inc.).  Extensive corporate-bond index data showed a net daily grade increment for high-grade versus high-yield constituents. High-grade bonds edged out high-yield debt as of 3 PM, London time.  Among European high-grade bonds showing a concurrence of top price gains at appreciable volumes traded,  Ingersoll-Rand Co. LTD (USD) 3.55% 11/1/2024 made some analysts ‘Conviction buy’ lists. (See the chart for Ingersoll-Rand Co. LTD bonds below). Pierre Robert

LATEST NEWS: Top moves, sovereign tighteners (5Y): Spain 34.67 and Sweden 10.67. Sovereign wideners (5Y):  Greece 157.645 and Germany 9.295.

New Issues	New Issues [Continued]
1. Daimler Canada Finance (NOK) 2.25% 11/7/2022 (10/31/2019): 750MM Senior Unsecured Notes. (None Current 11/01/2019)

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 11/01/2019, 134.57 NAV as of 11/01/2019, 103.32 Daily NAV Change (%) +0.04% Daily NAV Change (%) -0.08%

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: currently 7.5% (seasonally adjusted, May 2019)
• Eurostat’s quarterly GDP: 0.4% (2019 Q1)
• 6-month Euribor: current value –0.337%, as of 10/31/2019

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