Halister News

(Bloomberg) -- ECB’s CSPP program is providing fillip for the broader EUR corporate bond space amid signs the ECB has greater risk tolerance at this early stage than perhaps many investors had been expecting, Bloomberg strategist Simon Ballard writes.

• CSPP should remain key support for EU credit spreads over coming months; but could be some disappointment post July 18 if liquidity constraints mean purchases fall well short of assumed EU5b plus per month target
• Asian credit mkts cautious overnight; may damp EU credit mkt sentiment at open this morning
  • Persistently anemic global macro outlook can weigh on outlook for credit fundamentals; South Korea surprise rate cut o/night citing growing economic risks, slowing global trade and govt push to restructure indebted companies
• ECB CSPP appears to create solid support for risk appetite model as spread dispersion continues to compress
• CDX IG closed +0.2bps at 73.63 in overnight session; iTraxx Asia Ex Japan IG currently -0.3bps at 138.50

NEWS

• Corporate News
• Remy Cointreau Forecasts Higher Profit as Cognac Sales Rebound
• Home Retail 1Q Argos LFL Sales Up 0.1%, Gross Margin Down 100bps
• Rolls-Royce CEO Warns of ‘Higher Risk’ in Letter to Employees
• LG Electronics Rises as Kiwoom Sees 2Q Earnings Will Jump 152%
• Flybe Group FY Rev Rises 8.7%, Sees 1H 17% Capacity Increase
• Wincanton FY Rev. In Line; Sees Div. Growth to Match Earnings
• Systemair 4Q Profit Beats Estimates; Maintains Margin Target
• Tencent Said to Weigh Supercell Deal at $9 Billion Valuation

• Financial News
• Japanese Banks Expand to Ranks of World’s Biggest Energy Lenders
• Delta Lloyd Reports Successful Sale of Van Lanschot Stake
• Biggest Bank Quitting Japan Bond Club Shows BOJ Crushing Market

• Credit Rating News
• Fitch Affirms Coca-Cola Amatil Ltd at ’BBB+’; Outlook Stable
• Banks exposed to ’credit negative’ risk from Aussie housing, warns Moody’s

• Other News
• Draghi Seen Buying Junk Debt Shows ECB Will Do Whatever It Takes
• In Europe, Analyst Profit Upgrades Now Exceed Downgrades: Chart
• EU’s Buti: ‘No Contingency Plan’ for Europe in Case of Brexit

ANALYST VIEWS

• Secondary market liquidity is set to worsen, spreads might crunch tighter given that the ECB will be in the mkt everyday. (Even) if we get some macro vol that sees selling from investors...the ECB will be there to say “thank you very much, that will do nicely”: creditmarketdaily.com

NEW ISSUES

• State of Berlin EU250m 1% 5/2032 Tap MS +9
• Braas Monier EU435m 5NC2 Notes 3%
• JAB Holdings EU150m 1.75% 2023 Tap MS +133
• RATP EU500m 8Y FRTR +35
• 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.