Halister News

(Bloomberg) -- Use a rise in 10Y bund yields above 0.25% to scale back into longs with the historically high month-end index extension expected to provide additional support, Commerzbank strategists including Christoph Rieger write in client note.

• Expect bunds to rise with duration-intensive issuance increasingly recycled and Fed risks receding
• Firm anchoring of front-end rates and more balanced positioning render a re-run of last year’s selloff remote
• Curves should remain highly directional with even ultra-long curve and fly spreads shrugging off the structural increase in longer-dated issuance as investors have to ‘hunt for duration’
• Accordingly, expect 10s30s bund and IRS curves to resume their flattening trend with the bear-steepening/bull- flattening entrenched

(Bloomberg) -- (Corrects description of primary market in first paragraph) Resilient secondary credit-mkt price action, as well as a robust primary mkt, in the wake of BOJ disappointment this week has been a clear reflection of the structural bid for yield and spread product, Bloomberg strategist Simon Ballard writes.

• Asian equities lower overnight in wake of weak U.S. 1Q GDP; may trigger some profit taking/widening risk in EUR credit space this morning
  • Sentiment remains fragile and susceptible to gyrations in global rates, credit-quality outlooks
• Positive corporate earnings headlines buoy risk appetite, but given low level of expectations may hide true underlying challenges facing credit metrics
  • Difference between positive ‘surprise’ and negative sales/earnings growth in U.S. and European credit in 1Q16 highlights need for robust credit research/investment strategy
• Risk Appetite Model strength perhaps driven more by earnings ‘surprise’ than ‘growth’

• CDX IG closed +1.8bps at 76.42 in overnight session; iTraxx Asia Ex Japan IG is currently +0.1bps at 140.78

NEWS

• Corporate News
• Sanofi Profit Shows Little Growth Amid Bid for Medivation
• BASF First-Quarter Profit Beats Estimates on Auto, Personal Care
• AstraZeneca Earnings Fall as Recent Acquisitions Push Up Costs
• Puma 1Q Adjusted Sales Rise 7.3%, Confirms 2016 Forecast
• IAG 1Q Profit Beats Estimate, Reiterates FY View
• SES 1Q Rev., Ebitda In Line With Ests.; Takes Control of O3b
• KPN Earnings Trail Estimates Weighed Down by Enterprise Segment
• Linde Quarterly Profit Beats Estimates amid Oil, Gas Slowdown
• Eni 1Q Adj. Net Loss EU479m Misses Est. for Loss EU12.3m
• Rexel 1Q Sales, Adj. Ebita Below Last Year; Maintains FY Targets
• Telefonica 1Q Oibda EU3.4b; Est. EU3.4b
• Anheuser-Busch to Sell More SABMiller Assets to Win EU Approval

• Financial News
• Danske Beats Estimates as Bank Weathers Negative Rates
• RBS Posts Larger Net Loss on Dividend Payment to Government
• Bankia 1Q Net Misses Estimate; CET1 Fully-Loaded 12.52%

• Credit Rating News
• S&P Affirms Woodside ’BBB+’ Rating; Outlook Remains Negative
• S&P Affirms Vietnam Ratings At ’BB-/B’ With Stable Outlook

• Other News
• Pimco Favors Top-of-Pyramid Bonds as China Lets Zombies Default
• Spanish Banks Circle Capital-Hungry Portuguese Lenders

ANALYST VIEWS

• New deals continue to perform on the break and there is little or no repricing of secondaries. Corporate bond spreads have been grinding steadily tighter without any fuss and new deals are being taken down with aplomb: creditmarketdaily.com

NEW ISSUES

• Alimentation Couche-Tard EU750m 10Y MS +125
• Banco De Sabadell EU500m 10Y Tier 2 at 5.625%
• Bankinter EU200m PNC5 AT1 Notes 8.625%
• Bank Gospodarstwa Krajowego EU500m 10Y MS +120
• Belfius Bank EU500m 10Y Tier 2 MS +255
• Belgium EU3b 7Y, EU3b 50Y Bonds
• Kering EU500m 10Y MS +67
• Nationwide Building Society GBP500m 10Y UKT +138
• 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.
• NOTE: EU CREDIT DAILY won’t be published on Monday (May 2) due to the U.K. Bank Holiday. Publication will resume May 3.

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