HALISTER1: EU CREDIT DAILY: Feeling Stressed; EDF Beats, Barclays Misses

EU CREDIT DAILY: Feeling Stressed; EDF Beats, Barclays Misses

(Bloomberg) -- Disappointment in BOJ stimulus announced overnight likely to further damp credit-market sentiment into the month-end, as investors await EBA stress-test results this evening, Bloomberg strategist Simon Ballard writes.
  • Italy’s Banca Monte dei Paschi di Siena expected to be at center of any negative consequences from stress tests
  • Still, robust technicals seen underpinning cash corporate credit spreads over the coming weeks, even if macro fundamental challenges may still be building
    • Alan Greenspan aired his concerns yday about over- stretched bond-market valuations, weak macroeconomics and the specter of stagflation, the nemesis of risk assets
    • Such concerns have been on many investors’ minds for months now; basis for quality bias in investment strategies
  • Recent compression in Risk Appetite Model reflects decline in volatility amid persistent investor appetite for yield
  • CDX IG closed -0.5bps at 79.69 in overnight session; iTraxx Asia Ex Japan IG currently +0.6bps at 120.44 and iTraxx Australia quoted +0.8bps at 110.00
NEWS
  • Corporate News
  • Wolters Kluwer Keeps 2016 Forecast; Raises Free Cash Guidance
  • Japan Airlines 1Q Net Income Drops 54.9%, Missing Estimate
  • IAG 2Q Earnings Misses Est; Sees Weaker Trading Environment inLo
  • UBM 1H Adj Operating Profit Up, Keeps Trading Outlook for Year
  • Sony Posts Surprise 1Q Profits, Maintains Earnings Outlook
  • Pearson Says Trading In Line With 2016 View; Keeps 2016 Forecast
  • Abertis 1H Net EU510M vs EU1.68B Year Earlier
  • Reckitt 2Q LFL Sales Miss Ests., 1H Adj. Operating Profit
  • Hitachi 1Q Net Income Rises 2.7%, Beating Estimate Beats
  • SES 1H Revenue Falls, Says Results in Line With Forecasts
  • Eni 2Q Adj. Net Loss From Continuing Operations; Div. In Line
  • Vinci First-Half Earnings Meets Estimates on Highways, Airports
  • Sanofi’s Profit Declines as Aging Drugs Face Competition
  • AB InBev 2Q Normalized Ebitda, Organic Sales Miss Estimates
  • EDF 1H Net Income Ex-Items Beats, Maintains 2016 Objectives
  • U.K. Casts Doubt on $24 Billion Nuclear Plan After EDF Approval
  • Mazda Motor 1Q Net Income Falls 42%, Misses Estimate
  • Financial News
  • Barclays 2Q Adj. Pretax Misses; CET1 Ratio Rises to 11.6%
  • UBS Quarterly Profit Falls 14% Amid Subdued Client Activity
  • Bank of Ireland 1H Underlying Profit EU560M Versus EU743M Y/Y
  • Swiss Re Quarterly Profit Falls on Higher Catastrophe Claims
  • Generali 2Q Profit Falls as Investment Income Drops
  • Credit Rating News
  • S&P Says Philippine Ratings Outlook Stable; Killings Unsettling
  • S&PGR Afrms Colonial First State Fund Rtgs At ’AAAm’, ’AAf’
  • Other News
  • Kuroda’s $26 Billion Gift to Stock Market Underwhelms Investors
  • Atlanta Fed Cuts U.S. GDP Forecast After Fresh Export Data
ANALYST VIEWS
  • The corporate bond market is not broken, doesn’t need fixing, and certainly does not need the heavy hand of (BOE) meddling and manipulation: creditmarketdaily.com
NEW ISSUES
  • Affordable Housing GBP191.4m 2043 Tap UKT +41
  • State of Hessen EU500m 20Y MS +3
  • 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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