Halister News

(Bloomberg) --U.K. March industrial production m/m est. 0.5% vs prev -0.3%.

• U.K. March industrial production y/y est -0.4% vs prev -0.5%
• U.K. March manufacturing production m/m est. 0.3% vs prev -1.1%
• U.K. March manufacturing production y/y est. -1.9% vs prev -1.8%

(Bloomberg) -- Portugal to sell EU750m-1b 2.875% 07/2026 at 11:30am CET; mixed views on the auction from analysts, though considerable concession over past week seen as supportive.

• Commerzbank (Michael Leister)
  • Markets have made room for the auction, PGBs have significantly underperformed Spain, Italy
  • Remain cautious on PGBs overall, particularly given Portugal’s sluggish issuance progress this year

• Mizuho (Antoine Bouvet)
  • 10Y spreads vs Spain back to 1-month wides; decision by DBRS to maintain investment-grade rating removes risk of losing PSPP eligibility
  • Issue trades rich on fitted curve, offers little relative value

• RBS (Marco Brancolini)
  • Expect decent demand; recently revised down PGB issuance target, assume IGCP will minimize 2016 issuance, and govt will not boost cash buffer
  • Continue to like front-end Portugal, as sub-5Y protected by LTRO-II, where a vast take-up is expected; expect some of the money taken by banks to be channeled into carry trades

• Danske (Arne Lohmann Rasmussen)
  • PGBs underperformed strongly ahead of auction, widening ~30bps to bunds last week, despite DBRS maintaining investment grade rating
  • Seen as positive that the market is set-up for today’s PGB supply

Economic Release Details: {BTRR1DAY Index ECOD} --TONY JORDAN

(Bloomberg) -- Something of a divided credit market at the moment; yields firmly anchored and synthetic indexes gyrating around macro headlines and equity-mkt movements, while cash indexes have been leaking marginally wider in recent days, Bloomberg strategist Simon Ballard writes.

• No capitulation among the real-money community, but the weight of new issuance may now be having a small re-pricing effect on secondary paper; period of digestion needed
  • Tightening of many new issues’ re-offer pricing from IPT suggests demand/supply dynamics is still robust, but worthy of monitoring going forward as we head toward ECB CSPP at end-June
• In cash bonds, combination of supply volumes and macro uncertainty creating a quality bias among investors; EUR IG/HY spread now at 367bps
• Credit spreads remain underpinned, but mask quiet drift wider in spread dispersion in Risk Appetite Model

• CDX IG currently -0.2bps at 80.90 in overnight session; iTraxx Asia Ex Japan IG is currently -1.5bps at 143.20

NEWS

• Corporate News
• TUI Says Preparing a Sale of Its Specialist Group Division
• EON Profit Beats Estimates With 30% Jump on Gazprom Accord
• Altice First-Quarter Earnings Stall as French Unit Struggles
• William Hill Says Trading Remains In Line With Previous Guidance
• Toyota Forecasts 35% Net Drop After 4Q Miss; Plans 3% Buyback
• National Express Underlying Revenue up 4%
• Wolters Kluwer Keeps 2016 Forecast; Says Digital Driving Growth
• Carlsberg Revenue Beats Analyst Estimates on Eastern Europe
• Hochtief 1Q Sales Above Estimates, Confirms 2016 Guidance

• Financial News
• Raiffeisen Eyes Merger With Parent to Ease Regulatory Burden
• ABN Amro First-Quarter Profit Slips on Lower Commission Income
• Mediobanca 3Q Net Beats Estimate; CET1 Fully Loaded 13.2%

• Credit Rating News
• Fitch Affirms Australia’s Four Major Banks

• Other News
• Hardcore Bear ETFs Poised to Swell Past Bulls as Inflows Surge
• Vietnam Seeks Foreign Investors to Participate in Bank Reforms

ANALYST VIEWS

• Soon enough we will get a borrower print in a short maturity with a negative yield. We will be paying that issuer for the privilege of holding its debt: creditmarketdaily.com

NEW ISSUES

• Abertis Infraestructuras EU1.15b 10Y MS +95
• AXA EU500m 12Y MS +55
• CDC $1b 3Y MS +37
• CNH Industrial Finance Europe EU500m 7Y 3% Yield
• Deutsche Hyp EU750m 8Y Covered MS -1
• Eni EU700m 6Y, EU800m 12Y
• Kellogg Company EU600m 8Y MS +77
• Latvia EU650m 20Y MS +50
• Madrid EU700m 5Y Interp SPGB +27
• Mapfre EU1b 10Y MS +115
• NAB EU750m 5Y FRN, EU1b 10Y Fixed Bonds
• Pernod Ricard EU600m 10Y MS +100
• Simon Property EU500m 9Y MS +90
• 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.