Halister News

(Bloomberg) -- Cash corporate bonds are set to end the week softer as bond market weakness persists and after Janet Yellen fueled near-term Fed rate rise speculation with her JEC testimony, Bloomberg strategist Simon Ballard writes.

• Rising sovereign bond yields driving an unwind of risk appetite, even if equities buoyed by economic growth optimism
  • Market will be looking for any hints on ECB policy outlook when president Draghi addresses European Banking Congress later
• Geopolitics to also remain critical element in investor sentiment/risk appetite over coming weeks as president-elect Trump builds his team and U.K. Brexit negotiations highlight challenges ahead

• Bloomberg Barclays Eur-Agg Corporate index closed Thursday at 120bps (+2bps); Bloomberg Barclays Eur HY index closed at 414bps (+3bps)
• CDX IG closed Thursday -0.5bps at 74.78; iTraxx Asia Ex Japan IG is currently +1.9bps at 128.18 and iTraxx Australia quoted +1.3bps at 112.00

NEWS

• Corporate News
• VW Said to Cut 23,000 Jobs, Save $3.9 Billion in Labor Pact
• Ford Cuts Profit Outlook Amid Glut With Dawn of Trump Era
• Fuller Smith 1H Revenue up 11%; Trading As Expected Since Period
• AOL Said to Cut 500 Workers to Narrow Focus on Mobile, Video

• Financial News
• Bank Bosses Soften Tone on Brexit as May Extends Olive Branch
• Greece’s National Bank Begins Sale of Bulgarian Unit
• Spanish Banks to Face Negative Impact of Higher Bond Yields: KBW

• Rating News
• S&PGR Revises Telstra Outlook To Negative; ‘A/A-1’ Rtgs Affrmd
• Fitch Maintains Bluestar’s ‘BBB+’ Rating on Watch Positive
• South Africa Junk Rating Seen Inevitable, This Year or Next

• Other News
• Global Bonds Poised for Biggest Two-Week Loss in Quarter Century
• Emerging-Market Assets Retreat After Yellen Backs Rate-Rise Case
• Japan Megabank Default Risk Drops Amid Trumpflation Hopes
• Brexit Could Boost EU’s Capital Market, ECB’s Angeloni Says
• Yellen Signals Fed Won’t Be Cowed After Trump’s Election Victory

ANALYST VIEWS

• There is a persistent air of uncertainty now, but (primary) deals have been getting done... We think that this is a lost opportunity for borrowers. There is still demand for corporate bonds: creditmarketdaily.com
• A continued rise in global yields towards more normal levels would change long term investment cases. While HY should continue to exhibit lower sensitivity to fluctuations in rates than IG peers, they should suffer much more from an end of the ‘hunt for yield’: Commerzbank

NEW ISSUES

• KfW GBP150m 2% 12/2018 Tap UKT +24
• PRS Finance GBP265m 10Y Senior Secured UKT +46
• State of Schleswig-Holstein EU300m 0% 7/2018 Tap MS -22
• Vivendi EU600m 7Y MS +80
• European IG credit pipeline here and HY credit pipeline 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.