EU CREDIT DAILY: GBP Credit in Focus; BHP, Abengoa, CS, JPM
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By Simon Ballard (Bloomberg) -- GBP credit is proving less well supported relative to the EUR corp credit mkt, as the underlying currency weakens, even in the recent context of generally tightening spreads. Investor concerns stemming from the prospect of four months of U.K. debate over EU membership are highlighted by the GBP/EUR IG spread, which is sitting around an historic high lvl of 103bps, Bloomberg strategist Simon Ballard writes.
- Corp credit spreads could now remain range-bound at best as we head toward month-end
- Macroeconomic concerns underpin defensive positioning, while expectation of further ECB stimulus in early March may prove a fillip for risk appetite
- Weak price action in Asia credit mkts and oil overnight and weakened yuan underscore fragility of global growth assumptions and outlook for risk assets
- Risk Appetite model seeks to end February on a firm note
- CDX IG currently -0.8bps at 113.57 in overnight session; iTraxx Asia Ex Japan IG is currently -0.7bps at 158.12
NEWS
- Corporate News
- BHP Cuts Dividend for First Time in 15 Years on Profit Drop
- InterContinental Hotels to Pay a $1.5b Special Dividend
- Danone Forecast Signals That 2016 Sales Growth May Decelerate
- Qantas announces record first-half profit on low fuel prices
- Abengoa to Report Losses That May Exceed EU500M
- Financial News
- Swiss Re Quarterly Profit Beats Estimates; Names New CEO
- Credit Suisse Hires Morgan Stanley’s King for Algorithmic Sales
- HSBC’s $143 Billion China Credit Exposure an Investor Concern
- Australian banks hit record exposure to commercial property
- JPMorgan’s ‘London Whale’ Surfaces to Say ’12 Loss Not His Fault
- Rating News
- Petronas, ONGC, Oil India at Higher Risk of Downgrade: Moody’s
- India’s Fiscal Metrics Will Remain Weaker Than Peers: Moody’s
- S&P Downgrades Trilogy International Partners To ’CCC-’
- Other News
- Top Macro Hedge Fund Sees Monetary Easing as Boon for Stocks
- BlackRock Warns Bond Traders They’re Underestimating the Fed
ANALYST VIEWS
- With less than a week to go before we close out the second month of the year, we can at least be relieved that it’s been a little less fraught than the opening one. It looked bad at one stage, but we seem to have found some kind of floor: creditmarketdaily.com
NEW ISSUES
- Bpifrance Financement EU700m 10/2019 Tap FRTR +23
- Deutsche Bahn Finance EU500m 10Y MS +28
- Deutsche PBB EU500m 6Y Covered MS +8
- NAB GBP250m 3Y FRN 3mL +77
- State of Thuringia EU200m 0.5% 2025 Tap MS -3
- Vodafone EU6b 4-Part Fixed, FRN
- WL Bank EU125m 0.75% 2/2026 Covered Tap at MS -2
- 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 JPM US (JPMorgan Chase & Co)
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