Halister News

(Bloomberg) -- ECB starts buying corporate bonds today as part of its CSPP, a milestone in the history of EUR credit markets. Immediate impact on prices may be small though; recent spread performance suggests that much of the positive effect of there being a new marginal buyer may already be priced in, Bloomberg strategist Simon Ballard writes.

• Market will be eagerly awaiting details of EU central banks buying corporate bonds on behalf of the ECB; but holdings under the CSPP will only be published/updated on a weekly basis
  • Poor secondary mkt liquidity suggests initial evidence of buying may be limited; spreads could see some consolidation if volumes disappoint
• Overnight Asian stock declines on China trade data may weaken EUR credit-mkt sentiment this morning, but cash bonds likely underpinned by CSPP
• Risk Appetite model registered further decline in spread dispersion on eve of CSPP commencement

• CDX IG closed +0.7bps at 73.86 in overnight session; iTraxx Asia Ex Japan IG currently +0.7bps at 139.21

NEWS

• Corporate News
• Sainsbury 1Q LFL Retail Sales Ex-Fuel Beat Estimates
• WH Smith 14-Week Like-for-Like Sales Flat, Confident for FY
• Boohoo.com 1Q Sales Up 41%, Raises FY Sales Growth Forecast

• Financial News
• National Australia Taken to Court as Rate-Fixing Case Widens
• India Private Bank New Loans Outpace State Rivals for First Time

• Credit Rating News
• 1MDB Defends Liquidity Position After Moody’s Removes Rating
• Indonesia Euro Bond Costs Edge Up on S&P as Deficit to Swell
• ContourGlobal LP Rating To ’BB-’ from ’B+’; Otlk Stable: S&PGR

• Other News
• Clinton Claims Historic Victory as Battle With Trump Opens
• Draghi Fires Starting Gun on Corporate Bond Purchases in Europe

ANALYST VIEWS

• We will all look back at this moment in history and shake our heads in disbelief; in the meantime, there’s no point betting against the continued grind lower in yields/higher (govie) bond prices: creditmarketdaily.com

NEW ISSUES

• eircom Finance EU500m 6NC2 Senior Secured 4.5%
• State of Hessen EU1.125b Long 10Y MS -6
• Ile De France EU650m 9Y Green Bond OAT +30
• JPMorgan Chase EU2.5b 2Y FRN 3mE +22
• NordLB Lux. Covered Bond Bank EU500m 7Y MS +20
• Stora Enso EU300m 7Y MS +200
• Sumitomo Mitsui Financial EU1.5b 10Y MS +105
• Westpac NZ EU750m 5Y Covered MS +18
• Indonesia EU3b 7Y, 12Y Bonds
• 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.