HALISTER1: EU CREDIT DAILY: Alcoa Kicks Off 1Q; Nomura Cuts, Italy Fund

EU CREDIT DAILY: Alcoa Kicks Off 1Q; Nomura Cuts, Italy Fund

(Bloomberg) -- Risk-asset sentiment remains optimistic with cash corporate bonds seeing firm price action, equity markets being buoyant and haven flows in European govt bonds reversing, Bloomberg strategist Simon Ballard writes.
  • Still, Alcoa’s 1Q16 earnings overnight painted a cautious macro outlook as profits slumped 92% and company cut its 2016 global aerospace sales growth outlook
  • Lingering global macro uncertainty continues to support argument for bottom-up approach to investment strategy despite optimism over China economic data; investor caution reflected in iTraxx indices’ weakness vs underpinned cash bond market
    • iTraxx Xover +28bps mtd, EUR HY cash bond index -17bps mtd
  • Risk Appetite model registers drop in volatility vs 2 weeks ago, but still wide of year ago level
  • CDX IG currently +0.8bps at 81.22 in overnight session; iTraxx Asia Ex Japan IG is currently -1.2bps at 144.90
NEWS
  • Corporate News
  • Alcoa Lowers Forecasts as Demand Slows From Jets to Metals
  • Tesco to Sell 8.6% Equity Stake in Lazada for $129m
  • Asos 1H Retail Gross Margin Beats, On Track to Achieve Outlook
  • GTH Finance to Sell $1b HY Bond Guaranteed by VimpelCom: Moody’s
  • Financial News
  • Italy Forms $5.7 Billion Fund to End Doubts About Banking System
  • Nomura Said Planning to Shut Down European Equity Business
  • Credit Rating News
  • Fitch: China Coal Company’s Bond Default Underlines Sector Risks
  • S&P: Rtg Otlk On Japan’s Fast Retailing To Stable; Rtg Affrmd
  • Other News
  • Renzi Draws His Sword as Bad Loans Hold Back Italian Revolution
  • Australia Joins U.S. Bonds in Global Race to Bottom for Yields
  • Stock Market Shows Draghi Can’t Count on Europe CEOs for Growth
ANALYST VIEWS
  • The week has got off to a bright if rather unexciting start. Stocks generally up, oil in a narrow range and corporate bond spreads unchanged. What’s not to like? creditmarketdaily.com
NEW ISSUES
  • Air Liquide EU300m 6Y bonds atni bank MS +30
  • BMW Finance EU750m 4Y bonds at MS +28, EU750m 8Y bonds at MS +43
  • Eurogrid EU750m 12Y bonds at MS +83
  • InterXion Holding tapped INXN 6% 7/2020 by EU150m at 104.50 (OBL +528)
  • DNB Boligkreditt EU1.5b 7Y covered bonds at MS +16
  • Muenchener Hypo EU500m 10Y covered bonds at MS -1
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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