Halister News

(Bloomberg) -- Credit-market focus today and tomorrow seen turning more toward Thursday’s ECB rate decision and rhetoric at the following press conference. Any hint on the probability of a QE extension next year, rather than tapering early, could be key to the near-term price performance of EUR corporate bonds, Bloomberg strategist Simon Ballard writes.

• GBP remains the whipping boy of currency markets, although cable may have found an implied floor around the $1.20 level; GBP bonds showing some resilience but spreads remain susceptible to further rates market selloff
• Asian credit mkts stronger overnight and dollar weaker on speculation U.S. monetary policy will remain accommodative: suggests firm opening for EUR credit risk today
  • Given uncertain oil price outlook, investor sentiment may be tested later this week by Saudi Arabia’s first international bond offering; deal could be for min $10b 5y, 10y and 30y paper

• Risk Appetite Model is slowly recouping last week’s weakness
• CDX IG closed +0.2bps at 75.85; iTraxx Asia Ex Japan IG is currently +0.4bps at 118.36

NEWS

• Corporate News
• Ryanair Cuts FY17 Guidance by 5%, Cites GBP Drop Post Brexit
• Danone 3Q LFL Sales Growth 2.1% vs Est. 2.4%, Confirms Outlook
• Connect Group FY Pretax Rises, Focus on Organic Growth in 2017
• Hays 1Q Net Fees Increase Y/y for 14th Consecutive Quarter
• Bellway FY Pretax Profit Beats Ests.; Raises Dividend
• Burberry 1H Rev., 2Q Retail Comp Sales In Line With Estimates
• Bureau Veritas 3Q Revenue Slides; 2016 Outlook Reduced
• Com Hem 3Q Underlying Ebitda Tops Est, Cuts Capex Forecast
• Remy Cointreau 2Q Organic Sales Growth Beats Ests.
• Asia Telecom Sector to See Slowing But Healthy Growth: Moody’s

• Financial News
• Credit Suisse Hires HSBC’s Yeung for New Credit Trading Desk
• Commerzbank to Make 88% of Planned Job Cuts in Germany, BZ Says
• Samba Third-Quarter Profit Drops 2.2% on Higher Provisions
• Banco Popular to Buy Back Aliseda for Bad Bank: Cinco Dias

• Rating News
• Moody’s affirms Hitachi’s A3 rating; outlook stable
• S&PGR Affirms Then Withdraws Credit Union Baywide ’BB/B’ Rtgs
• Negative Rates to Have ‘Limited’ Effect on Japan Banks: Moody’s
• S&PGR Affirms Ratings On LGFA; Outlook Stable

• Other News
• Carney to Ignore Inflation Jump as November Rate Cut Forecast
• Australia Bank Regulator to Review Pay Structures in Risk Review
• Pimco Cuts Asia Risk While Being Bullish on India, Indonesia

ANALYST VIEWS

• BNP Paribas Downgraded After Recent Outperformance, UBS Says
• Last week the ECB (CSPP program) accumulated EU1.835b of debt, down from EU2.24b the week before. We read nothing into the decline in purchases in the week and remain impressed that they can take so many bonds down in such illiquid markets: creditmarketdaily.com
• The mild steepening of credit curves seen recently didn’t fully restore risk/reward. We therefore would still opt to increase beta via adding credit risk, not duration, and also in this scenario would prefer moving down the rating ladder and capital structure: Commerzbank

NEW ISSUES

• Aroundtown Property EU500m PNC6.25 Hybrid MS +437.5
• BNG EU500m 20Y MS +7
• BNP Paribas Fortis EU500m 7Y Covered Bond MS -10
• PKO Bank Hipoteczny EU500m 6/2022 Covered MS +18
• SNS Bank EU500m 15Y Covered MS +9
• UniCredit EU1b 10Y MS +173
• 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.