HALISTER1: EU CREDIT DAILY: Fed Countdown; FedEx Beats, Julius Baer Hiring

EU CREDIT DAILY: Fed Countdown; FedEx Beats, Julius Baer Hiring

(Bloomberg) -- EUR credit markets likely to see a muted session today as participants hold breath ahead of the FOMC; underlying tone should remain firm though in wake of overnight Asian equity rally following BOJ monetary-policy adjustments, Bloomberg strategist Simon Ballard writes.
  • WIRP now showing only 22% probability of a U.S. rate rise today; Fed hasn’t increased rates with WIRP less than 80% since 1999, so any hike later would surprise, likely create negative reaction among risk assets
  • EUR corporate spreads should be well anchored this morning after BOJ shift in policy framework to target yield curve
    • But Asia rally might soon be faded if initiatives seen as still insufficient to address deflation
    • Global rates outlook still key driver of medium-term risk appetite
  • Risk Appetite Model sees small consolidation wider on Fed/BOJ uncertainty
  • * Bloomberg Barclays Eur-Agg Corporate index closed yday at 111bps (unchanged); Bloomberg Barclays Eur HY index closed at 412bps (+1bps)
  • CDX IG closed +0.1bps at 77.26 in overnight session; iTraxx Asia Ex Japan IG currently +5.4bps at 122.56 and iTraxx Australia quoted flat at 107.50
NEWS
  • Corporate News
  • HTC Climbs to Highest in Two Weeks After Unveiling New Phones
  • Majestic Wine Sees Full Year Ebit to Be Below Expectations
  • Saga On Track to Meet Full Year Targets, Raises 1H Dividend 23%
  • FedEx Boosts 2017 Outlook After Topping Quarterly Estimates
  • Glencore Sees Nickel Price Rising on Global Supply Shortage
  • Financial News
  • Japan Banks Jump as BOJ Keeps Rate Unchanged, Targets Yields
  • China’s Postal Bank Said Poised to Raise $7.4 Billion in IPO
  • Intesa in Talks to Buy ITB for Up to EU180m, Sole Reports
  • Julius Baer Adding Headcount in HK, Singapore in ‘A Big Way’
  • Credit Rating News
  • S&PGR Affirms ’BBB/A-2’ Ratings On Philippines; Outlook Stable
  • Fitch Affirms Six Taiwanese Banks; Outlook Stable
  • Other News
  • Gold Seen Entering Long-Term Bull Cycle as Asset Bubbles Po
  • Some Hope for European Profits as 15 Months of Downgrades Ends
  • Allure of BBB Bonds Grows for Aussie Insurer Battling Low Yields
ANALYST VIEWS
  • The drivers for corporate bonds and the likelihood that spreads start to tighten again and returns rise again will come from an increase in government bond prices (lower yields) plus central bank buying of corporate debt: creditmarketdaily.com
NEW ISSUES
  • CA Assurances EU1b 32NC12 Subord MS +435
  • KfW EU4b 7Y Global MS -24
  • Land NRW $1.5b 3Y Reg S MS +24
  • RLB Oberoesterreich EU500m 10Y Covered MS +10
  • Toyota Motor Credit GBP500m 6Y UKT +68
  • eDreams ODIGEO EU425m 8/2021 NC2 Snr Sec 9% Area
  • 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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