HALISTER1: EU CREDIT DAILY: Curves Tighten Before ECB; More Earnings Due

EU CREDIT DAILY: Curves Tighten Before ECB; More Earnings Due

(Bloomberg) -- Credit market demand-supply dynamics remain strong and the path of least resistance for secondary corporate spreads seems to remain tighter as all eyes turn to today’s ECB rate decision, Bloomberg strategist Simon Ballard writes.
  • EUR, GBP and USD credit quality curves continue to flatten as lower-quality bonds offer yield appeal
    • Asian credit markets strengthened overnight on stimulus hopes, current buoyant corporate earnings season; supportive technicals and fundamentals
  • Yet credit market sentiment remains susceptible to macro and geopolitical headline risk amid Turkey’s three-month state of emergency, Brexit negotiations uncertainty, U.S. elections
  • Risk Appetite Model highlights still robust nature of credit demand-supply dynamics as summer lull approaches
  • CDX IG closed -1.1bps at 75.25 in overnight session; iTraxx Asia Ex Japan IG currently -0.7bps at 119.10 and iTraxx Australia is currently -1.2bps at 109.12
NEWS
  • Corporate News
  • Unilever 2Q Underlying Sales Growth Beat, 1H Core EPS In Line
  • Daimler’s Mercedes Profit Margin Drops on New E-Class Sedan
  • Swatch First-Half Profit Declines to Lowest in Seven Years
  • Severstal 2Q Ebitda up 93% Q/q to $526m; Est. $546m
  • Euromoney 3Q Rev. Fell by 1% to GBP104.7m; Sept. Visibility Low
  • Britvic 3Q Rev. Beats Ests.; Keeps Outlook Unchanged
  • Thule 2Q Underlying Ebit, Net Sales Beat Ests.
  • EasyJet 3Q Revenue Misses Estimate
  • SABMiller First-Quarter Sales Gain as Brewer Awaits Takeover
  • Hermes 2Q Sales Constant FX Beat Ests., Sees 1H Profit Up Y/y
  • Saab 2Q Operating Profit Misses Estimates; Keeps 2016 Outlook
  • Publicis 1H Rev. Beats; Sees Tougher 3Q on 2015 Account Losses
  • Roche First-Half Profit Rises 7% as Cancer Drugs Get Combined
  • ABB Profit Beats Estimates as China Continues to Invest in Grids
  • Metso 2Q Sales Miss; Still Sees Weaker Trading Conditions
  • Financial News
  • Danske Bank Second-Quarter Profit Slips, Missing Estimates
  • Swedbank Profit Jumped 71% in Second Quarter, Beating Estimates
  • Bankinter 1H Net EU286M, Misses EU319M Estimate
  • Close Bros Says Continuing to See Net Inflows, No Brexit Impact
  • Russia Revokes License of Moscow-Based Bank ABB
  • Credit Rating News
  • S&PGR Affirms Standard Chartered Bank (Taiwan) Rtgs; Otlk Pos
  • Moody’s affirms Export-Import Bank of Malaysia’s ratings; outlook stable
  • Other News
  • HSBC’s Johnson Out on Bond After Airport Arrest in Currency Case
  • Singapore Takes Aim at Banks Over 1MDB Lapses; Seizes Assets
  • Trump Chooses War With Cruz at Convention Aimed at Unification
ANALYST VIEWS
  • In a central bank driven world, macro factors continue to trump idiosyncratic and sector specific stories. Beta is what matters most for positioning: Commerzbank
NEW ISSUES
  • HSH Nordbank EU350m 0.375% 4/2023 Covered Tap MS +18
  • EIB EU300m 1% 3/2031 Tap MS -16
  • Schleswig-Holstein EU300m 0% 7/2018 MS -14
  • CBA EU1.25b 10Y Covered Bond MS +20
  • NRW Bank $1b 3Y Reg S MS +28
  • FMS Wertmanagement $200m 10/2020 FRN Tap 3mL +19
  • Goldman Sachs EU2b 5Y FRN 3mE +100, EU2b 10Y MS +130
  • Teva Total EU4b 4Y, 8Y, 12Y Fixed Notes
  • Gamenet EU200m 5NC1.5 Senior Secured 6%
  • Bank of America EUR 3Y FRN, EUR 7Y, GBP 9Y
  • 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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