Halister News

(Bloomberg) -- Uniper, which holds EON’s conventional generation and trading business, starts trading in Frankfurt following the spin-out.

• Uniper price was seen at ~EU10.93/share, according to avg estimate of 12 investors and analysts polled by Bloomberg
• Uniper is to be included in the DAX only today, at close of trading E.ON weighting will be adjusted for Uniper exit
• EON has distributed 53% of Uniper’s stock to existing investors, handing out 1 share for every 10 of EON
• Uniper prospectus here
• Earlier: EON Shares Fall 11% to One-Year Low Following Uniper Spinoff
  • Oddo Seydler says EU11 per Uniper share would be “a favorable entry point for long-term investors”

(Bloomberg) -- Overnight Asian equity/credit declines suggest a weak opening for EUR risk assets, although Friday’s corporate-bond selloff was a largely measured and composed one that simply erased some of the recent spread tightening, Bloomberg strategist Simon Ballard writes.

• Credit-market sentiment remains susceptible to gyrations in the rates outlook, Fed rhetoric ahead of Sept. 21 FOMC
• Spread weakness may prompt some investors to look for buying opportunities; a modest Fed tightening would be supported by improving macro fundamentals
  • Medium-term demand/supply foundations of corporate bonds remain firm; investors continue to eye incremental yield opportunities across the quality curve with primary market the key source of liquidity
• Risk Appetite Model eases back modestly on rates selloff
• Bloomberg Barclays Eur-Agg Corporate index closed Friday at 107bps (flat); Bloomberg Barclays Eur HY index closed at 367bps (+8bps)
• CDX IG closed +4.4bps at 79.60 in overnight session; iTraxx Asia Ex Japan IG currently +2.2bps at 109.95 and iTraxx Australia quoted +3.6bps at 98.98

NEWS

• Corporate News
• RWE to Push Ahead With Innogy IPO, Still Sees Listing in 4Q
• Sasol FY Adj. EPS 41.40 Rand vs 49.75 Rand Y/Y; Est. 40.31 Rand
• EDF French Workers Strike Extended 24 Hrs to Sept. 13-15
• Samsung Drops After Warnings to Stop Using Note 7 Phones

• Financial News
• Mortgage defaults tick higher among regional (Aussie) banks
• Morelli May Be Named New Paschi CEO as Soon as Thursday: Stampa
• Oil Impairments at Norway’s Banks Set to Rise, Regulator Says

• Credit Rating News
• Fitch: Basel III Add to Indian Banks’ Capital Trigger Risk

• Other News
• Basel Capital Revamp Endorsed Without Assurance Sought by Europe
• Musk Says Tesla’s New Autopilot Could Have Saved Driver’s Life
• U.K. Mustn’t Get Competitive Edge After Brexit, Danish PM Says

ANALYST VIEWS

• We still opine that yields will be going lower again, and that the current move in the U.S. will start to recede in terms of the contagion impact it is having on government bond yields here: creditmarketdaily.com

NEW ISSUES

• EDC GBP150m 1% 12/2020 Tap UKT +36
• Galp Gas EU600m 7Y MS +140
• State of Hessen EU300m 5Y MS -19
• 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.

--ANGELA CULLEN

(Bloomberg) -- Companies terminated amicable merger talks because of disagreement over the locations of the merged company, including the role of Munich, people familiar with the matter say.

• Linde falls 4.9% at Tradegate vs Xetra close

(Bloomberg) -- It will only take a Fed funds rate of 1.0% to turn the dollar into a G-10 high yielder, Deutsche Bank strategists including Alan Ruskin, write in note.

• If Fed tightens once in 2016 and twice in 2017, as DB expects, then regression-based rules of thumb on short-term rates suggest USD could gain between 5% and 10% versus EUR, GBP and AUD
• USD is the major currency likely to benefit the most from a fiscal stimulus in current circumstances
  • 2017 is expected to mark a shift to greater fiscal accommodation in G-10, based on fiscal multipliers, credit risk, sensitivity to external account deterioration and, most importantly, the monetary response
• EUR/USD seen ending 2017 at 0.95; USD/JPY at 94.0; GBP/USD at 1.15 and AUD/USD at 0.63

(Bloomberg) -- Mizuho Bank prefers to buy USD/CNH on dips as CNH liquidity squeeze, which has helped curb bearish yuan sentiment, isn’t structural and is unlikely to be long-lasting, Asian FX strategist Ken Cheung writes in note today.

• Remains bearish on CNH; sees USD/CNH testing 6.72 in near term if Sept. Fed rate hike unfolds although FX pair’s upside is capped currently
• CNH rises 0.12% to 6.6879 per USD; USD/CNH 12-month forward points climb 102.5 to 1,760 after earlier touching 1,973, highest since Mar. 11
• PBOC’s plan to resume 28-day reverse repo is a bid to lengthen the funding maturity and lower short-term liquidity risk, Cheung says; adds this offering could reduce market reliance on short-term funding
• If PBOC leaves the 28-day reverse repo yield at 2.6% as it did in Feb., 1-month interbank repo rate could stabilize further