Halister News

(Bloomberg) -- Credit markets look set to open 2H16 today with a constructive tone, but absolute volumes may be limited ahead of the U.S. holiday weekend. The volatility of synthetic indexes continues to reflect overarching fragile risk sentiment, Bloomberg strategist Simon Ballard writes.

• Comments from BOE governor Carney yesterday to weigh on near-term GBP risk appetite
  • Weaker macro outlook to damp spread performance in GBP HY credit, though BOE easing prospects may buoy GBP IG demand and steepen GBP corp quality curve
  • No capitulation in cash bonds, underpinned by global low-yield environment, but GBP credit market likely to underperform EUR, USD peers near-term on haven flows, fundamentals
• ECB loosening of QE rules for bond purchases could create significant new fillip for risk appetite, credit-market dynamics
• Risk Appetite Model balancing macroeconomic and geopolitical risks
• CDX IG closed -4.3bps at 76.98 in overnight session; iTraxx Asia Ex Japan IG currently -2.6bps at 139.49

NEWS

• Corporate News
• Fatal Crash of Tesla on Autopilot Under NHTSA Investigation
• Hershey Board Rejects $23 Billion Takeover Bid From Mondelez

• Financial News
• U.K. New Top Bank Regulator Faces Tough First Day After Brexit
• Wells Fargo Completes Buy of GE Capital’s Asia Distrib

• Business
• UniCredit Turns to French Investment Banker to Instill Rigor
• EU’s Bank Resolution Plan Questioned as Denmark Joins Doubters

• Credit Rating News
• European Union’s Credit Rating Cut by S&P After Brexit Vote
• Moody’s Sees Indonesia Tax Amnesty Program as Credit Positive
• Lions Gate Entertainment May be Cut by Moody’s on Starz Buy

• Other News
• ECB Said to Weigh Looser QE Rules as Brexit Depletes Asset Pool
• China’s Manufacturing Treads Water in June as Services Perk Up
• Brexit Means Brexit: Johnson’s Fall Reduces Room for EU-Turn
• Pimco Says Market Underestimates Fed Rate Path, Recommends TIPS

ANALYST VIEWS

• Commodities and most EM assets are close to being fairly priced, with headwinds now set to increase. Financing environment may remain relatively benign as U.S. rates rise gradually, though China’s mini-cycles of economic activity and asset performance will remain a meaningful risk: Roubini

NEW ISSUES

• KfW GBP350m 1.125% 12/2019 Tap UKT +40
• British American Tobacco GBP500m 5Y UKT +130
• Deutsche Bahn Finance EU750m 15Y MS +26
• Brown-Forman EU300m 10Y MS +85, GBP300m 12Y UKT +150
• Rentenbank $150m 6/2021 FRN Tap 3mL +26
• 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.