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European Bond Research – November 29, 2019

Posted on November 29, 2019
EUROPEAN BOND RESEARCH
November 29, 2019

Bond Markets


POLLS FOR THE UPCOMING DECEMBER UK ELECTION SUGGEST THAT BORIS JOHNSON COULD PICK UP A NUMBER OF SEATS SOLIDIFYING HIS LEADERSHIP AND HIS BREXIT PLANS. FTSE 100 -0.94%, German DAX -0.07%, CAC 40 -0.13%, STOXX Europe 600 -0.44%.  The 10-year Gilt up 2.3 basis points.

SOVEREIGN BOND YIELDS WERE DOWN THROUGHOUT EUROPE. STOCKS WERE ALSO LOWER. The US Fed added over $88 billion to the repo market to ensure liquidity. (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,  Aston Martin Capital Ltd. (USD) 6.5% 4/15/2022 Reg S  made some analysts ‘Conviction buy’ lists. (See the chart for Aston Martin Capital Ltd. bonds below). Pierre Robert

Credit-Default Swap Market


LATEST NEWS: Top moves, sovereign tighteners (5Y): Germany 8.81 France 17.87. Sovereign wideners (5Y):  Denmark  9.59 and Portugal 37.76.

New Issuance


New Issues New Issues [Continued]
1. Wepa Hygieneprodukte GMB (EUR) FLT% 11/15/2026 Reg S (11/28/2019): 200MM Secured Notes, Price at Issuance 100.

2. Wepa Hygieneprodukte GMB (EUR) 2.875% 12/15/2027 Reg S (11/28/2019): 350MM Secured Notes, Price at Issuance 100, Yielding 2.88%.

3. HSBC France (EUR) 0.8% 12/13/2034 (11/29/2019): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding .8%.

ADI Indexes


DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 11/29/2019, 134.23 NAV as of 11/29/2019, 104.53
Daily NAV Change (%) +0.01% Daily NAV Change (%) +0.09%

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 ratecurrently 7.5% (seasonally adjusted, May 2019)
  • Eurostat’s quarterly GDP: 0.4% (2019 Q1)
  • 6-month Euribor: current value –0.347%, as of 11/28/2019

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