HALISTER1: EU CREDIT DAILY: Edging Tighter; Airbus Probe, DBS Profit Falls

EU CREDIT DAILY: Edging Tighter; Airbus Probe, DBS Profit Falls

(Bloomberg) -- While not without occasional volatility, global credit spreads have maintained a steady grind tighter in recent weeks as corporate bonds remain the asset class of choice amid anemic growth and low rates, writes Bloomberg strategist Simon Ballard.
  • Idiosyncratic event risk firmly in spotlight this week; bonds may experience some price/spread weakness
    • Airbus announced it’s under investigation by U.K. SFO after allegations of bribery and corruption
  • Asian credit markets stronger overnight in wake of U.S. NFP report Friday, optimism toward U.S. macro outlook; suggest firm open to EUR credit mkts this morning
  • CDX IG closed -2.5bps at 76.12 in overnight session; iTraxx Asia Ex Japan IG currently -3.2bps at 115.24 and iTraxx Australia quoted -3.1bps at 103.94
NEWS
  • Corporate News
  • Airbus Says U.K. Fraud Office Starts Criminal Bribery Probe
  • Air France-KLM July Passenger Traffic Rises 0.5%
  • PostNL 2Q Cash Underlying Operating Profit Falls to EU47m
  • Woolworths To Relocate David Jones head Office To Melbourne
  • Fuji Soft Rises to Two-Month High Ahead of Results
  • Brother Industries Reports 1st Qtr Group Earnings Result
  • Metro Retail Says 2Q Income Rose to 209.2m Pesos on Higher Rev
  • Financial News
  • DBS Profit Falls as Swiber Provisions Offset Interest Income
  • Raiffeisen Schweiz Interested in Acquiring Private Bank: Finews
  • Credit Rating News
  • South Korea’s Credit Rating Raised One Level to AA by S&P
  • Other News
  • Bond Market’s Big Illusion Revealed as U.S. Yields Turn Negative
  • Draghi Jumps Brexit Hurdle to Find Oil Damping Inflation Outlook
ANALYST VIEWS
  • While (U.S.) output growth is strong now, this growth spurt follows a period of substantial weakness. However, should the August jobs report reflect another month of robust hiring, that could put a Sept. rate hike back on the table: Roubini
  • We look at the impact of the Bank of England’s easing measures on sterling credit markets and its potential future relevance to sterling investment grade and high yield: CreditSights
NEW ISSUES
  • Vodafone GBP1b 40Y UKT +168
  • Barclays HoldCo GBP1.25b 10.5Y UKT +238
  • 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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