Halister News

(Bloomberg) -- U.K. Aug. industrial production m/m est. 0.1% vs prev 0.1%.

• U.K. Aug. industrial production y/y est 1.3% vs prev 2.1%
• U.K. Aug. manufacturing production m/m est. 0.4% vs prev -0.9%
• U.K. Aug. manufacturing production y/y est. 0.8% vs prev 0.8%

(Bloomberg) -- Enter steepener on Sept. 2018-Sept. 2020 short-sterling spread vs equivalent Euribor flattener with risk of inflation overshooting in medium term greater in the U.K., Societe Generale strategist Jamal Meliani writes in client note.

• Buy L U18-L U20 vs selling ERU18-ERU20; entry 2bp, target 20bp, stop -6bp
• Do not believe the ECB will be in a position to hike rates for several years, with the euro-area unemployment rate unlikely to have fallen enough by 2018-2019 to push 5y5y inflation expectations durably higher
• In contrast, if the U.K. government delivers fiscal loosening and economic data continues to surprise on the upside, this may help restore some risk premium to the long end of the short sterling curve

(Bloomberg) -- GBP credit has held up reasonably well this month, but the currency’s overnight ‘flash crash’, while having rebounded, will likely be at the centre of investor focus this morning, Bloomberg strategist Simon Ballard writes.

• Volatility spike could also create some accounting pain this morning for banks running short positions into today’s U.S. payrolls data and further damp activity during the session
• Brexit rhetoric, ‘hard’ or otherwise, likely to remain a key driver of defensive investor sentiment in GBP credit space over coming months
• Investor angst over Deutsche Bank has receded for now, but lender still in spotlight as it considers capital raising plans, possible asset mgmt arm IPO
• Today’s U.S. jobs data (13.30 BST) will be the latest key dots on the route to a potential Fed rate rise by year end. As such, trading may be muted ahead of the numbers

• Risk Appetite Model grinds tighter as fears fade ahead of U.S. jobs data
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 114bps (flat); Bloomberg Barclays Eur HY index closed at 404bps (-5bps)
• CDX IG closed -0.1bps at 74.55 in overnight session; iTraxx Asia Ex Japan IG currently -3.6bps at 112.44 and iTraxx Australia quoted +0.2bps at 103.00

NEWS

• Corporate News
• Samsung’s Profit Engines Keep Running Even Amid Note 7 Recall
• Jaguar Land Rover Sept. Sales Gain 28% Y/y to 61,047 Units
• LG Electronics 3Q Oper. Profit 283.2b Won; Est. 325.9b Won
• Honeywell Profit Misses Forecast on Weaker Aerospace Sales
• Ford closes its Australian factories after more than 90 years of car-making
• VW Plans to Shift Decision-Making to Brands, Regions

• Financial News
• Deutsche Bank Said to Weigh Capital-Raising Options With Banks
• Returns Lamented by Aussie Bank CEOs Still Among World Best
• BBVA to Close 100 More Branches Outside Catalonia: Expansion
• Banca Generali’s Mossa Denies Talks on UniCredit’s Fineco: Sole
• Dutch Insurer Delta Lloyd Rejects NN Group’s Unsolicited Bid

• Credit Rating News
• Fitch Affirms Nippon Life at ‘A’; Outlook Negative
• El Salvador Rating May be Cut by S&P on ‘Political Polarization’

• Other News
• Pound Flash Crash Has Traders Blaming Algos for Selling Frenzy
• Fed Hike Odds Jump to 64% From Coin Toss as Payrolls Test Looms
• BNY Mellon’s Hassell: Fed Won’t Move Any Time Soon
• Hurricane Matthew Weakens Slightly to Category 3 Storm as It Moves Closer to Florida

ANALYST VIEWS

• We believe (ECB) tapering as a means of QE-exit isn’t going to occur soon and that the Bund yield in the benchmark 10- year maturity will visit -0.20% before +0.20%: creditmarketdaily.com

NEW ISSUES

• EDF EU1.75b 10Y Green Bond, EU750m 20Y Bond
• EDF CHF400m 8Y, CHF150m 12Y Notes
• Hera EU400m 10Y MS +60
• Land NRW $250m 9/2018 FRN Tap 3mL +16
• 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.

(Bloomberg) -- Transaction values Atotech at 11.9 times its 2015 adjusted Ebitda, Total says in statement.

• Deal is subject to approval by the antitrust authorities

--MARTIJN VAN DER STARRE