EU CREDIT DAILY: Paring Loss; Toyota Recall, A.Dhabi SWF Merger
(Bloomberg) -- Corp credit mkts in the process of recouping some of Friday’s losses, with the liquid synthetic indexes leading the way. But balance of investor opinion remains finely balanced between whether this might mark the beginning of recovery or an opportunity to reduce risk into strength, Bloomberg strategist Simon Ballard writes.
- Asian credit markets have seen further strength overnight; suggests a positive tone for EUR risk assets at the open
- Continued absence of primary mkt activity a clear reflection of investor caution, lack of depth to recent spread tightening
- GBP corp credit likely to see further n-t underperformance vs EUR, USD risk as result of intensifying Brexit uncertainty
- Robust bottom up credit research now critical in investment strategy; Visa and Vodafone among first cos. to suggest could move HQs out of U.K.
- Risk Appetite Model gradually tracking 2010 as Brexit concerns weigh on sentiment
- CDX IG closed -6.6bps at 84.60 in overnight session; iTraxx Asia Ex Japan IG currently -3.6bps at 143.95
NEWS
- Corporate News
- Dixons Carphone FY Headline Pretax Up 17%, Rev. Up 5% LFL
- Stagecoach FY Rev. Misses Est, Adj EPS Beats
- Nike Worldwide Futures Orders Ex-FX Miss Est.; Falls 7% Post-Mkt
- Greene King FY Revenue in Line, Strong Start to Current Year
- Toyota Recalls More Than 4 Million Cars on Air Bags, Fuel Tanks
- Financial News
- Abu Dhabi Plans to Merge Sovereign Wealth Funds IPIC, Mubadala
- European Banks Spend Billions to Get U.S. Units Fit for Fed
- GAM Buys Cantab Capital for $217m Plus Deferred Consideration
- Credit Rating News
- Moody’s downgrades outlooks on 53 UK sub-sovereigns entities to negative
- Moody’s places Nextgen’s ratings on review for upgrade
- China Rating Firm to Set Up Hong Kong Unit on Panda Bond Demand
- Other News
- McCarthy & Stone Says Brexit Vote Has Introduced Uncertainty
- Merkel Says No Way Back From Brexit as Cameron Regrets Loss
ANALYST VIEWS
- Sovereign spreads and corporate spreads alike have re- tightened quite significantly. We would suggest that this pattern is very likely not sustainable and we would expect some upward pressure to set in over the coming days: RBC Capital Mkts
NEW ISSUES
- Primary Market Remained Bereft of Deals Tuesday
- 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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Tickers 7203 JP (Toyota Motor Corp)
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