EU CREDIT DAILY: Favorable Outlook; Ryanair Slows, UBS in China
(Bloomberg) -- Credit-market price action early this week may continue to show that initial interpretation of April FOMC minutes was overly hawkish. WIRP still showing only ~28% odds of a Fed rate increase in June and credit spreads are firm, suggesting still favorable outlook for risk assets, Bloomberg strategist Simon Ballard writes.
- Corp credit spreads susceptible to macro headlines; many investors still advocate up-in-quality, defensive portfolio positioning as risk/reward dynamics seen finely balanced at current spread lvls
- Near-term event risk to include Austrian elections, new Turkish PM, shifts in U.K. EU referendum polls
- Macro focus this week to include flash PMIs, German ZEW and Ifo surveys. Litmus tests for 2Q GDP
- Risk Appetite model registered modest tightening - volatility and spreads - as sentiment firmed into weekend
- CDX IG closed -0.2bps at 83.88 in overnight session; iTraxx Asia Ex Japan IG currently -0.1bps at 145.34
NEWS
- Corporate News
- Ryanair Forecasts Slowing Profit Growth on Falling Air Fares
- Germany’s Bayer Offers $62 Billion Cash to Acquire Monsanto
- Flight Centre Sees FY16 Profit Missing Target; Shares Plunge
- Toshiba Reports FullYr Grp Earnings Results
- GeoPark Ready to ‘Pounce’ on Deals as Cheap Oil Creates Bargains
- Financial News
- Aussie Banks Seem Sweeter to Bond Investors Even as Loans Sour
- Macquarie Bank Tightens Mortgage Lending in High-Density Areas
- RBNZ Seeks Submissions on Proposed Bank Outsourcing Rules
- Societe Generale Markets Senior and Subordinated Samurai Bonds
- UBS Starts Financial Futures Brokerage Service in China
- Online Lenders Will Be Just 1% of Market in 2025, Deloitte Says
- Credit Rating News
- Moody’s: Russian consumer finance lenders’ capital stays under pressure, despite lower loan losses
- Other News
- Brexit Would Harm City of London, British EU Commissioner Says
- El-Erian Says Fed Is Talking Up Rate Hike as Global Yields Rise
- Brazil Bond Market Set for Revival After Petrobras Ends Drought
ANALYST VIEWS
- We need signs of sustainable growth as a driver for corporate profits, which would then take away the fixation we currently have on U.S. rate dynamics (and potentially higher borrowing costs): creditmarketdaily.com
NEW ISSUES
- SNCF Reseau EU1B 5Y, EU400M 2.625% 12/2025 Tap
- Swiss Re Admin Re EU750M 7Y MS +117
- William Hill GBP350m Long 7Y 4.875%
- 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 RYA ID (Ryanair Holdings PLC)
Topics Leveraged Finance
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