HALISTER1: EU CREDIT DAILY: Asia Rebounds; HSBC, Toyota, Reckitt, RBA

EU CREDIT DAILY: Asia Rebounds; HSBC, Toyota, Reckitt, RBA

(To subscribe to EU Credit Daily, click here and set alert via ‘"Display & Edit’’) By Simon Ballard (Bloomberg) -- Analysis of CDS and cash spreads gives a bifurcated image of corporate credit space; derivatives edging tighter suggest the market may be primed for a recovery after the recent widening, but the inability of cash indexes to gain similar positive momentum would hint at the extent of investor caution, Bloomberg strategist Simon Ballard writes.
  • CoCos remain one of key asset classes under pressure; no sign of meaningful buying of CoCo bonds even after losing more than 20% of value YTD
    • Investor rhetoric suggests any buying interest will remain highly selective in coming weeks; generic spread selloff may reduce perceived need to take subordination risk, favor senior parts of capital structure, IG over HY
  • Rebound in Asian equities this morning as China returns from holiday should create generic fillip for EUR credit
  • Risk Appetite Model settling down, but may struggle to move back into ‘risk on’ mode
  • CDX IG currently -0.5bps at 121.56 in the overnight session; iTraxx Asia Ex Japan IG is currently -6.2bps at 169.90
NEWS
  • Corporate News
  • Reckitt 4Q LFL Sales Growth, 2015 Adj. Oper. Profit Beats Ests.
  • Toyota-Led Profit Gains at Risk as Carmakers Face Strong Yen
  • Japan Utilities Seen Pushing for Atomic Restarts as Reform Looms
  • Financial News
  • HSBC Keeps London Headquarters in Victory for U.K. Over Asia
  • Bank of Baroda Surges Amid Expectation for Profit After Big Loss
  • Bank of East Asia Rejects Hedge Fund’s Call to Explore Sale
  • Softbank Won’t Issue Debt to Finance Buyback
  • Rating News
  • S&P Says Hong Kong’s Property Market Will Get Tougher In 2016
  • Japan Major Banks’ Earnings May Fall 8% on Negative Rates: S&P
  • Other News
  • Banks Cutting Most-Experienced Bond Traders in Fixed-Income Cull
  • RBA’s Stevens Puts on Poker Face as Traders Bet He’ll Cut Rates
  • Yuan Rises Most Since 2005 as PBOC Voices Support, Raises Fixing
ANALYST VIEWS
  • “I wouldn’t be buying the dip just yet; after some of the moves we’ve seen these past few weeks, capitulation has become very topical. Capitulation in any asset class is a disorderly exit. Cash becomes king”: creditmarketdaily.com
NEW ISSUES
  • Schleswig-Holstein EU300m 3Y FRN 3ME +1
  • LBBW EU500m 6Y Covered Bond MS -3
  • Rentenbank EU400m 0.375% 1/2024 Tap MS -15
  • Klepierre EU500m 10Y MS +130
  • University of Leeds GBP250m 12/2050 Bonds UKT +100
  • EIB EU250m 1.25% 11/2026 Tap
  • EIB EU300m 2.625% 3/2018 Tap MS -20
  • 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 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)

Tickers
HSBA LN (HSBC Holdings PLC)

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