HALISTER1: EU CREDIT DAILY: CSPP Slows; BP Profit Drops, AB InBev Ups Offer

EU CREDIT DAILY: CSPP Slows; BP Profit Drops, AB InBev Ups Offer

(Bloomberg) -- Latest CSPP figures showing slower ECB purchases are amplifying a sense of seasonal summer lull, marked by dwindling liquidity, in European credit mkts. With corporate new issuance ticking over, reflecting consistent demand for yield and strength of technicals, the path of least resistance for cash bond spreads remains tighter, flatter for quality curve, through summer, Bloomberg strategist Simon Ballard writes.
  • Latest CSPP data show holdings of EU11.849b, implying a slower run-rate of EU1.422b over the past week
  • 2Q earnings season gaining momentum; BP, LVMH, Orange, Michelin, Apple release numbers today
  • Mixed equity markets and overnight nudge wider in Asia, Aussie iTraxx indexes reflect fragility of sentiment, may damp iTraxx Europe price performance early this morning
  • CDX IG closed +3.4bps at 79.61 in overnight session; iTraxx Asia Ex Japan IG currently +0.7bps at 119.80 and iTraxx Australia quoted +1.8bps at 111.37
NEWS
  • Corporate News
  • BP Profit Drops 45% on Lower Crude-Oil Prices, Misses Ests.
  • Michelin 1H Profit Beats Estimate; 2016 Guidance Confirmed
  • Orange 2Q Sales, Ebitda In Line With Ests.; Keeps Outlook
  • AB InBev Raises SABMiller Offer to GBP45/Share in Cash vs GBP44
  • Hyundai Motor 2Q Oper. Profit 1.76t Won; Est. 1.68t Won
  • Autoneum 1H Sales Rise, Ebit Margin Pre-Items Reaches Record
  • Interparfums 1H Revenue Rises 10%; Confirms Full Year Guidance
  • Elis Posts First-Half Profit, Confirms 2016 Outlook
  • Central European Media 2Q Net Rev. Up 3% to $175.2m
  • Unite Says Business Strong in 1H Despite Brexit Vote Uncertainty
  • B/E Aerospace 2Q Adj. EPS Beats Est., Raises 2016, 2017 Outlook
  • Financial News
  • Vontobel 1H Net Income Rises 6%; Reiterates 2017 Profit Targets
  • Comdirect 2Q Profit Jumps on EU41m One-Time Gain From Visa
  • BCP’s Millennium Says 2Q Net Rises to 293.8m Zloty on Visa Deal
  • Stock Sales Seen Aiding Japan Bank Profits as Rates Plunge
  • China Development Bank Said to Plan Special Drawing Rights Debt
  • Credit Rating News
  • South Africa Local-Currency Debt Rating Downgraded by Fitch
  • S&PGR Raises EnergyAustralia Rtgs To ’BBB’; Otlk Positive
  • Alaska Cut to Aa2 From Aa1 by Moody’s, May Be Cut Further
  • Other News
  • Singapore Banks Facing Earnings Stumble as Bad Loans, Sibor Bite
  • Sanders Backs Clinton After Fractious Opening of Convention
  • HSBC Bullish on India as a Third of World’s Bond Yields Negative
ANALYST VIEWS
  • It’s all good. Admittedly it is quieter than what we might like, but there is after all little or no supply to get excited about, nor much by way of macro news flow to have us down or upbeat: creditmarketdaily.com
NEW ISSUES
  • CCCI EU400m 0.375% 7/2020 Tap FRTR +23
  • Eircom Finance DAC EU200m 4.5% 2022 Tap 101.25/101.5
  • 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.
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