Halister News

(Bloomberg) -- While broad underpinnings of credit mkts remain firm, sentiment may be buffeted by a range of macro and geopolitical factors this week, Bloomberg strategist Simon Ballard writes.

• Volatile swings in Asian equities overnight highlights ongoing susceptibility of risk assets to China growth story
• Focus on ECB meeting Thurs; no change in rates expected, but new staff forecasts to help gauge inflation pressure going forward
• Geopolitical tension intensifying in U.K. ahead of June 23 referendum; GBP risk assets may maintain weak bias over coming month although GBP credit returns have been robust ytd (UR00 index +1.2%)
• Volkswagen earnings today beats expectation; may be positive catalyst for VW spreads as hint at stabilization post emissions scandal
• Risk Appetite model shows low volatility around U.K. bank holiday
• CDX IG closed -0.1bps at 76.548 in overnight session; iTraxx Asia Ex Japan IG currently +0.12bps at 140.456

NEWS

• Corporate News
• Volkswagen 1Q Profit EU3.44b; Reiterates 2016 Forecast
• Sun Pharma Falls Most in Two Months After Profit Misses Views
• Alrosa 1Q Ebitda Jumps 38% Y/y to 59.3b Rubles

• Financial News
• Delta Lloyd Starts Van Lanschot Offering to Boost Capital
• IG Group Sees FY Earnings to Be ‘Slightly’ Ahead of Views
• Credit Agricole Assurances to Buy 10% of Elis for EU192m
• PayPal to Halt Turkey Ops on Regulator Refusal of Application
• ASB Bank Says NZ Credit Growth Raises Risk Rate Cut Is Delayed

• Credit Rating News
• Rio de Janeiro Cut to B- From BB- by S&P, Outlook Negative
• Fitch Removes Zoomlion from Negative Watch, Affirms Ratings
• S&PGR Affirms BlueScope Steel ’BB’ Rtgs; Otlk Stable
• S&PGR Affirms And Then Withdraws AGL ’BBB’ Rtg At Co. Request
• Fitch Affirms Taiwan Power at ’A+’; Outlook Positive
• Fitch: China Property Rating Downgrades Driven by Divergence

• Other News
• Aussie Bond Holdings Cut by Foreigners to Lowest Ratio Since ’09
• Goldman Sees 70% Chance of China Shares Joining MSCI in June
• Doors Open to Foreign Banks in Somalia After Half-Century Hiatus

ANALYST VIEWS

• Focus has been totally around primary and the ECB. We expect the spread markets to show some significant tightening - whatever the ECB decides it feels it can lift from the secondary market: creditmarketdaily.com

NEW ISSUES

• No New Issues Monday
• 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.