European Bond Research – September 28, 2020

GLOBAL MARKETS REBOUND SHARPLY AS ENERGY AND BANKING STOCKS POP. OIL AND COMMODITIES ALSO JUMPED. THE DOLLAR WAS DOWN AGAINST MOST CURRENCIES.  FTSE 100 +1.46%, German DAX +3.32%, CAC 40 +2.40%, STOXX Europe 600 +2.22%.  The 10-year Gilt was up 1.4 bps.

CORONA VIRUS UPDATE: GLOBAL CORONAVIRUS TO DATE HAS HAD 33.5 MILLION+ CASES AND 1 MILLION+ DEATHS.  (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,  LYB International Finance BV (USD) 4.875% 3/15/2044 made some analysts ‘Conviction buy’ lists. (See the chart for  LYB International Finance BV bonds below). Pierre Robert

Industry Returns Tracker

Industry Past Day Past Week Past Month Past Quarter YTD Past Year Agriculture, Forestry, Fishing -0.34% -1.25% -1.00% 3.88% 4.47% 8.92% Mining -0.16% -0.87% -0.20% 3.38% -0.58% 2.20% Manufacturing -0.09% -0.02% 0.80% 4.14% 0.86% 2.81% Transportion, Communication, Electric/Gas -0.06% -0.46% -0.52% 1.71% 2.82% 5.14% Wholesale 0.02% -0.14% 0.24% 3.05% 9.98% 10.64% Retail 0.01% -0.92% 5.96% 22.45% -6.22% -4.82% Finance, Insurance, Real-Estate -0.15% -0.83% -0.24% 2.62% 4.61% 8.00% Services -0.40% -1.59% -1.83% 3.42% -1.41% 3.74% Energy -0.72% -0.12% -20.45% -30.11% -40.99% -46.44%   Total returns (non-annualized) by rating, market weighted.

LATEST NEWS: Top moves, sovereign tighteners (5Y): China 50.61, Belgium 13.54. Sovereign wideners (5Y):  Italy 136.59 and Greece 145.34.

New Issues	New Issues [Continued]
(None Current 09/28/2020)

DATA CHECK:

iShares Core EUR UCITS iShares Euro High Yield UCITS NAV as of 09/28/2020, 133.47 NAV as of 09/28/2020, 97.32 Daily NAV Change (%) +0.07% Daily NAV Change (%) +0.75%

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 –0.468%, as of 09/25/2020.

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