HALISTER1: EU CREDIT DAILY: ECB Decision Eyed; Wendel Loss, Westpac Refund

EU CREDIT DAILY: ECB Decision Eyed; Wendel Loss, Westpac Refund

(Bloomberg) -- Credit market activity seen modest this morning ahead of the ECB announcement later; Draghi generally expected to maintain, if not expand, policy accommodation, which should help underpin risk-asset valuations, Bloomberg strategist Simon Ballard writes.
  • Market speculating over possible increase in breadth of stimulus; ECB could add financials to CSPP, drop capital key allocation system, buy bonds below deposit rate/inside 2-yr maturity threshold
    • At very least, expected to extend QE beyond March 2017
  • Macro backdrop still positive for risk assets; Asian credit mkts firm overnight even as equities retreat on yen strength
  • Risk Appetite Model clearly highlights credit-market strength and extent of central bank spread manipulation
  • Bloomberg Barclays Eur-Agg Corporate index closed unchanged yday at 108bps; Bloomberg Barclays Eur HY index closed at 355bps (-8bps)
  • CDX IG closed +0.6bps at 75.58 in overnight session; iTraxx Asia Ex Japan IG currently -1.5bps at 106.59 and iTraxx Australia quoted flat at 95.73
NEWS
  • Corporate News
  • Wendel 1H Revenue EU4.09b, Posts 1H Net Loss
  • National Grid Files Rate Proposal for New York, Long Island Gas
  • Bourbon 1H Adj. Revenue Falls 21%, Net Loss Widens
  • Zoopla Sees FY Ebitda at Top End of Current Mkt Forecasts
  • Dixons Carphone 1Q U.K. & Ireland LFL Sales Beat Estimates
  • SAS 3Q Sales, Pretax Slightly Higher Y/y; Maintains FY Outlook
  • Financial News
  • Westpac refunds $20m to customers over foreign transaction fees
  • Yes Bank CEO Sees Capital Adequacy Exceeding 19% Post QIP
  • Dubai’s Arqaam Hires Ex-Mashreq Banker Hussain for Asset Mgmt
  • Sanlam 1H Normalized Headline EPS 2.08 Rand vs 2.24 Rand
  • FirstRand FY Profit Misses Estimates; Sees Risk of Downgrade
  • Credit Rating News
  • S&PGR Affirms ‘BB-’ Grupo Cementos de Chihuahua
  • BOC Aviation’s MTN Prog Rating Unaffected by Updates: Fitch
  • S&PGR Rates BOC Aviation Senior Unsecured Notes ‘BBB+’
  • Other News
  • China Auto Sales Rise 24.5% on Rush to Beat Expiring Tax Cut
  • S&PGR Says China’s Property Sector Revival Could Lose Steam
ANALYST VIEWS
  • Uncharted waters? You bet. Money still keeps flowing into corporate bond funds. It’s the fixed-income asset with the “most-est”, given those juicy returns this year (6.3% YTD in IG). It’s for another day that we fret about the exit: creditmarketdaily.com
NEW ISSUES
  • Belfius Bank EU500m 10Y Covered MS
  • Burgan Bank $500m 5-Yr Bond at MS+215bps
  • Bank of Nova Scotia GBP500m 5Y Covered UKT +63
  • EIB EU4b 7Y EARN MS -22
  • Ferrovial Emisiones EU500m 6Y MS +52
  • KfW GBP250m 1.375% 2/2021 Tap UKT +20
  • Natixis Pfandbriefbank EU250m 10Y Cov MS -6
  • Thermo Fisher EU1b 8Y MS +80, EU600m 12Y MS +100
  • WPP GBP400m 30Y UKT +160
  • 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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