Halister News

(Bloomberg) -- EUR corporate bonds were buoyed by Mario Draghi’s net dovish comments Thursday, but credit spreads could see some consolidation into the weekend as focus swings to quarterly earnings, Bloomberg strategist Simon Ballard writes.

• Asian credit mkts softer for choice overnight on mixed earnings; equities mixed and synthetic indexes marginally weaker
  • Risk appetite buffeted of late by mix of positive corp earnings results (incl. Goldman Sachs, Microsoft) and lackluster forecasts (incl. Nestle, eBay)
• GBP risk assets set to remain volatile over coming weeks as U.K. warned to expect ’tough’ Brexit talks; investors may see better price performance potential in EUR credit exposure
• Risk Appetite Model pushed further into risk-on territory by ECB rhetoric
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 111bps (flat); Bloomberg Barclays Eur HY index closed at 374bps (-7bps)
• CDX IG closed +0.3bps at 73.90; iTraxx Asia Ex Japan IG is currently +0.2bps at 116.38 and iTraxx Australia quoted +0.7bps at 104.08

NEWS

• Corporate News
• BAT Plans to Take Full Control of Reynolds in $47 Billion Deal
• Daimler Quarterly Profit Jumps 10% on Mercedes Car Demand
• Volvo Profit Falls as North American Truck Orders Plunge
• SAP Raises Sales, Profit Forecast on Improved Cloud Outlook
• Assa Abloy 3Q Operating Income Misses Estimates, Sales Beat
• Metso Revenue Below Estimates, Higher Uncertainty in Oil & Gas
• Villeroy & Boch 9-Month Revenue Rises 2.8%; Keeps FY Forecast
• InterContinental Hotels 3Q Comparable Revpar Misses Estimates
• Norwegian Property 3Q Net NK195.7m Vs NK71.2m
• Sanoma Raises 2016 Outlook on Improved Operational Performance
• Ericsson 3Q Net Loss Exceeds Ests.; Sees Weaker Sales Growth
• Telia 3Q Adj. Ebitda in Line With Ests.; Net Misses on Provision

• Financial News
• Bank of Ayudhya 3Q Net 5.83b Baht; Analyst Est. 5.48b Baht
• BNP Paribas Offers Employees EU1,000 Bonuses, Les Echos Says
• China Banks Sold Net 179.3b Yuan of Forex for Clients in Sept.

• Rating News
• Costa’s Balancing Act Seen Letting Portugal Keep Crucial Rating
• Fitch: Indian Telco Outlook Negative Amid Intense Competition
• S&PGR Affirms APPF Retail Rtgs At ’A+/A-1’; Outlook Stable

• Other News
• Euro Falls to Lowest Since March as Draghi Guarded on QE Course
• Foreign Funds Baffled by Brexit See ‘Sell’ Sign Flash on Gilts

ANALYST VIEWS

• With the baseline scenario for the growth outlook subject to downside risks and underlying inflation trends failing to convince, we believe it is odds-on that the (ECB’s) asset purchase programme will have to be extended beyond next March, and may well be increased in size and/or be more targeted: creditmarketdaily.com

NEW ISSUES

• Aviva EU500m 7Y MS +60
• EIB EU500m 3/2026 at MS -28
• Goldman Sachs EU1.25b 8.5NC7.5 MS +105
• Hypo Oberoesterreich EU300m 7Y Covered Bond MS +8
• Western Power GBP30m 2.671% 2043 I/L Tap UKTI +145
• 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.