Halister News

(Bloomberg) -- A potentially event-filled week, with the initial macro focus likely on headlines after the inconclusive Doha oil talks and any EM weakness due to specter of impeachment of Brazil’s President Rousseff, writes Bloomberg strategist Simon Ballard.

• IG/HY credit spreads could come under some near-term pressure from fragile sentiment, but cash bonds generally seen underpinned; synthetic indexes likely to see lion’s share of any volatility
  • Earnings season to continue to offer event risk data points; Amazon, Alphabet, Netflix, Johnson & Johnson and McDonald’s among key results to watch this week
  • Brexit debate likely to dominate GBP credit mkt over coming weeks; uncertainty may undermine risk appetite
  • Other key macro data points this week include U.S. retail sales and euro area GDP
• Risk Appetite Model saw further marginal tightening of spreads and vol into close last week on back of robust tone to risk asset mkt sentiment

• CDX IG is currently +2.0bps at 80.21 in overnight session; iTraxx Asia Ex Japan IG is currently +0.8bps at 140.27

NEWS

• Corporate News
• Toyota Seen Losing $277 Million as Quakes Halt Japan Output
• Reckitt 1Q LFL Sales In Line, On Track to Meet 2016 Targets
• Qantas Drops Most in Two Years as It Cuts Domestic Expansion

• Financial News
• CaixaBank Launches EU1.6B Takeover Bid for Portugal’s Banco BPI
• Banker Unrest Threatens Credit Suisse, Deutsche Bank Turnarounds
• HSBC’s Gulliver to Step Down in Two Years, Sunday Times Says

• Credit Rating News
• China State Enterprises Likely to Suffer More Defaults, S&P Says
• S&P Report Says Net Negative Outlook Bias For Asia-Pac Rises
• Bahamas Affirmed ’BBB-/A-3’ by S&P, Outlook Remains Negative

• Other News
• Rousseff Hangs by a Thread After Losing Impeachment Vote
• Oil Plunges After Output Talks Fail Amid Saudi Demands Over Iran
• Treasuries Gain as Oil Plunge Drives Demand for Haven Assets
• India 10.5% Junk Dollar Bond Rally Endures as S&P Praises Revamp

ANALYST VIEWS

• If the ECB doesn’t deliver on its corporate-bond purchase program, spreads will gap wider, performance will be lost and borrowers will face higher funding costs: creditmarketdaily.com

NEW ISSUES

• No European Syndicated Corporate Bond Issuance Friday; fourth zero issuance day YTD
• 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.