Halister News

(Bloomberg) -- U.K. advance 1Q GDP q/q est. 0.4% vs prev 0.6%.

• U.K. advance 1Q GDP y/y est. 2.0% vs prev 2.1%

(Bloomberg) -- Germany to sell EU1b 2.5% 08/2046 bond at 11:30am CET. Analysts see recent rise in 30Y yields as supportive, though there’s some concern investor appetite may weaken ahead of upcoming FOMC decision.

• Mizuho (Antoine Bouvet)
  • Yield of ~1% should attract outright demand; limited size of auction should allow market to easily absorb supply
  • 10s30s spread is correctly priced; In micro RV, spread vs old benchmark has been stable since end of March

• Commerzbank (Benjamin Schroeder)
  • Selloff in EGBs, 10s30s steepening has pushed 30Y Bund yields above 1%
  • 10s30s steepening started to fade yday, even as yields rose; suggests stabilization as ultra-long supply from semi-core sector is increasingly cleared

• DZ Bank (Hendrik Lodde)
  • Investor participation may be reduced ahead of the FOMC decision this evening; demand could be anemic, despite the recent run-up in yields

• UniCredit (Edoardo Campanella)
  • Risks are skewed toward higher yields; ultra-long end may attract some interest due to the need for liability matching
  • Absolute level of barely above 1% looks strange given it implies a negative expected real rate over next three decades

(Bloomberg) -- Credit markets appear to have found some stability again after weakness at start of week, but sentiment still fragile, finely balanced ahead of FOMC decision today and BOJ Thursday, Bloomberg strategist Simon Ballard writes.

• Myriad factors driving investor sentiment; Fed this evening, macroeconomic data, mixed corporate earnings, geopolitics
• Corporate credit continues to offer haven status vs mkt uncertainty; Brexit, Spanish elections
  • Search for yield remains positive for spreads; ECB CSPP to support further near-term compression in spreads across EUR credit curve
• Primary-market activity robust; EUR corporate issuance now >EU500b YTD, set to remain buoyant into month-end
  • But fundamental credit research critical to investment strategy; S&P global corporate default tally now 51 YTD, highest since since 2009
• Risk Appetite Model reflects consistent resilience of corporate credit asset class to pockets of broader market volatility

• CDX IG currently -0.1bps at 74.63 in overnight session; iTraxx Asia Ex Japan IG is currently -0.6bps at 139.97

NEWS

• Corporate News
• CRH Says Positive Trading Backdrop in Major Markets in 1Q
• Apple’s Waning Smartphone Sales End 51-Quarter Growth Streak
• Adidas Raises 2016 Net Income, FX-Neutral Sales Forecast
• PSA Group Quarterly Revenue Falls as Car Sales Decline in China
• Mazda Motor Reports Full-Year Parent Earnings Results
• Statoil Posts Surprise Profit as It Cuts Costs Amid Oil Drop

• Financial News
• Barclays 1Q Pretax Drops 25%; CET1 Ratio Declines to 11.3%
• Nomura Posts Surprise Quarterly Loss on Trading, Brokerage Slump
• Banco Santander First-Quarter Profit Falls on Revenue Decline
• Nordea Bank Profit Sank 28% Last Quarter as Revenue Declined
• SEB Delivers Bigger Loss Than Analysts Predicted as Income Sinks
• Storebrand 1Q Net Income Beats Ests. Due to Savings, P&C Growth
• ECB’s Coeure Says Greek Banks in Solid Capital Position: Il Sole

• Credit Rating News
• Exxon Mobil Loses Top Credit Rating It Held Since Depression
• Fitch Affirms Oil India at ‘BBB-’; Outlook Stable
• S&P Report Says UAE Property Prices Could Drop Further In 2016
• China Ratings Downgrade Wave Seen as Next Driver of Bond Slump

• Other News
• China Debt Headache Swells as Bank Breaches Bad-Loan Buffer
• Trump Declares He’s ‘Presumptive Nominee’ as Clinton Wins Four

ANALYST VIEWS

• There are plenty who buy a new issue corporate-bond offering at a negative yield. They will effectively pay for the privilege of not holding cash: creditmarketdaily.com

NEW ISSUES

• McDonald’s Corp EU2.5b Long 4Y, Long 7Y, 12Y
• Aroundtown Property EU600m 6Y MS +210
• Liberty Mutual Group EU750m 10Y MS +215
• Vakifbank EU500m 5Y Covered Bonds MS +250
• Enagas EU750m 12Y MS +62
• Glencore CHF250m 5Y at MS +279.5
• FMS Wertmanagement GBP150m 12/2019 Tap UKT +43
• ESM EU3b 16Y Bonds MS +7
• U.K. GBP4.75b 2.5% 7/2065 Gilt Tap UKT +0.25bps
• Finland GBP150m 1.625% 12/2020 Tap UKT +34
• BerlinHyp EU325m 8Y Covered MS -3
• 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.

--SHAMIM ADAM

(Bloomberg) -- Net income rose 3.3% to EU869m yoy; est. EU846.2m

• Iberdrola comments in an e-mailed statement.
• Sales rose to EU8.18b vs EU8.78b; est. EU8.3b
• Co reaffirmed 5% 2016 earnings growth target
• Co reaffirmed dividend payment of at least 0.28/shr