EU CREDIT DAILY: Focus on NFP; ECB Taper Worries; Tesco Beats
(Bloomberg) -- Credit market focus now turning to Friday’s U.S. jobs data, the next key data point on route to Dec. FOMC , Bloomberg strategist Simon Ballard writes.
- Expectations are increasing about a 25bp Fed rate rise by year-end, but the latest downward revision to IMF global growth forecasts should keep aggregate monetary policy expectations anchored for now
- Meanwhile, speculation that the ECB could begin tapering QE after March next year seen as having little credibility; may damp near-term risk-asset price performance if view re-gains momentum
- Even as the macro backdrop remains net supportive of risk appetite, credit spreads may consolidate on ECB outlook, Brexit, Deutsche Bank and U.S. politics
- Risk Appetite Model showing signs of recovery from last week’s weakness
- Bloomberg Barclays Eur-Agg Corporate index closed yday at 115bps (unchanged); Bloomberg Barclays Eur HY index closed at 412bps (-3bps)
- CDX IG closed -0.3bps at 75.38 in overnight session; iTraxx Asia Ex Japan IG currently +0.8bps at 116.95 and iTraxx Australia quoted +1.0bps at 103.83
NEWS
- Corporate News
- Tesco 1H Operating Profit Ex-Items Beats Ests.
- Cargill Profit Jumps 66% on Cattle Herd Growth, Beef Demand
- Woolworths Unit to Acquire Australian Menswear Retailer Politix
- Net1 to Buy 15% Stake in Blue Label Telecoms for 2 Billion Rand
- Solocal Says Creditors With 43% of Debt Agree to Proposals
- Air Berlin to Join Talks on New Airline Group With TUI, Etihad
- Financial News
- Deutsche Bank Brings Too-Big-to-Fail Conundrum Home to Merkel
- NN Aims to Make All-Cash Offer for Delta Lloyd of EU5.30/Share
- Credit Rating News
- S&PGR Afrms, Withdraws Credit Agricole Australia ’A/A-1’ Rtgs
- Fitch Rates China Bluestar’s US Dollar Notes Final ’BBB+/RWP’
- S&PGRBulletin: ElectraNet, ETSA Ratings Unaffected By Storms
- Verallia’s PIK Notes May Expose Whole Group to a Default: S&PGR
- Other News
- Pence Offers Trump Lesson in Discipline in Debate With Kaine
- Negative-Yield Contagion Spreads as Draghi Bond Mania Moves East
- JPMorgan Challenges HSBC for GCC Bond Crown as Sales Set Record
ANALYST VIEWS
- Reports that the ECB would be looking to reduce their QE purchases after March (are) almost laughable. However, if true, there is going to be some serious pain from now on: creditmarketdaily.com
NEW ISSUES
- ASB Finance EU500m 7Y Covered MS +12
- Belden EU200m 10NC5 Senior Subordinated 4.125%
- Flemish Community EU500m 10Y, EU750m 20Y Bonds
- Italy EU5b 50Y BTPS +52
- Rabobank EU500m 5Y Green MS +28
- World Bank GBP300m 12/2023 UKT +27
- Bank Otkritie $400m 3Y Bonds 4.5%
- 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.
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers 2539Z GR (European Central Bank)
TSCO LN (Tesco PLC)
To de-activate this alert, click
hereUUID: 7947283