EU CREDIT DAILY: Sentiment Stable; AstraZeneca Beats, ITV Down
(Bloomberg) -- EU credit market sentiment stabilizes, as U.S. election outcome is assessed, after losses were recouped by Wednesday’s close; Asian risk assets extend recovery in overnight rally, Bloomberg strategist Simon Ballard writes.
- Earnings sesson remains in full spotlight; U.S. (S&P500 index) 3Q earnings +2.99% sales growth, +2.74% earnings growth
- EUR (BE500 index) 3Q season currently yielding +20% earnings growth, but -2% sales growth
- Auto sector may find itself back under scrutiny, spreads pressured wider, as Renault now referred to French prosecutors over diesel emissions
- Bloomberg Barclays Eur-Agg Corporate index closed Wednesday at 113bps (+2bps); Bloomberg Barclays Eur HY index closed at 395bps (+10bps)
- CDX IG closed Wednesday -0.2bps at 75.64; iTraxx Asia Ex Japan IG is currently -1.0bps at 117.38 and iTraxx Australia quoted -3.1bps at 105.49
NEWS
- Corporate News
- AstraZeneca 3Q Core EPS Beats, Revenue Misses; Keeps FY Forecast
- Dairy Crest 1H Revenue Drops, Adjusted Pretax Profit Rises
- National Grid 1H Operating Profit Up, Sees In-Line Performance
- Lagardere 3Q Revenue Rises, Confirms Ebit Growth Target
- ITV Sees 4Q Ad Revenue Down on Political, Economic Uncertainty
- San Miguel’s 9-Month Net Income Said to Be 43b Pesos
- Halfords 1H Adjusted Pretax Drops 12%, FY To Be As Expected
- Continental Profit Tumbles 40% on Warranty, Research Expenses
- Vedanta 1H Ebitda $1.2b Down 4% Y/y, Operating Profit $720m
- Puma Raises Outlook as Third-Quarter Earnings Beat Estimates
- Sappi 4Q Ebitda Ex-Special Items Rose to $209m vs $201m Y/Y
- Deutsche Telekom Earnings Rise as U.S. Business Wins Users
- Financial News
- Denmark’s Nykredit Sells Headquarters for DKK1.4 Billion
- Aurelius Sees More Corporate Transactions in Coming Months
- Hannover Re 3Q Profit Beats Ests.; Sees 2017 Net Income Higher
- Aegon Posts 3Q Net Income vs Loss; Underlying Pretax Drops 7%
- 3i Group Net Asset Value Rises 38% on Infrastructure Unit Growth
- Deutsche Bank Has Customers’ Confidence, Matherat Tells Echos
- Generali CFO: Impact From Italy Earthquakes EU16m So Far
- Rating News
- S&PGR Affirms U.S. ’AA+/A-1+’ Ratings; Outlook Remains Stable
- Other News
- Trump Starts New Political Era as Republicans Claim Mandate
- Icahn Left Trump Victory Party to Bet $1 Billion on Stocks
ANALYST VIEWS
- Fixed income, in terms of duration risk in euros should outperform the U.S., while total returns in dollar credit will erode faster than in the euro-denominated debt markets. The credit to equity rotation trade is a slow burning fuse though, and we ought to keep an eye on flows through the second quarter onwards in 2017: creditmarketdaily.com
NEW ISSUES
- No New Issues Wednesday
- European IG credit pipeline here and HY credit pipeline here
- Issuers exposed to S-T rollover and interest-rate reset risk here
- NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
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