European Bond Research – November 13, 2019

NIGEL FARAGE OF THE BREXIT PARTY agreed to not contest any conservative party candidates for the Dec 12th election. He has stated that they will contest all Labor party candidates for that election. FTSE 100 -0.31%, German DAX -0.68%, CAC 40 -0.33%, STOXX Europe 600 -0.57%.  The 10-year Gilt lost 5.5 basis points.

EUROPEAN STOCK MARKETS WERE LOWER. European sovereign bonds were noticibly lower across the board halting gains over the last several weeks.  (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,  Petrobras Global Finance BV (USD) 8.375% 5/23/2021 made some analysts ‘Conviction buy’ lists. (See the chart for Petrobras Global Finance BV bonds below). Pierre Robert

LATEST NEWS: Top moves, sovereign tighteners (5Y): Belgium 16.54 and Sweden 10.62. Sovereign wideners (5Y):  China 36.93 and Denmark 9.885.

New Issues	New Issues [Continued]
1. Electrolux AB (SEK) FLT% 11/19/2024 (11/12/2019): 750MM Senior Unsecured Notes. 2. Peach Property Group AG (EUR) 3.5% 2/15/2023 Reg S (11/12/2019): 250MM Senior Unsecured Notes, Price at Issuance 99.238, Yielding 3.75%.

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 11/13/2019, 133.96 NAV as of 11/13/2019, 103.62 Daily NAV Change (%) -0.01% Daily NAV Change (%)-0.11%

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 –0.328%, as of 11/12/2019

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