Halister News

(Bloomberg) -- Geographic differentiation is re-emerging as a key theme across global credit markets. Nascent U.S. economic growth and cautious expectations of Fed tightening are antonymous to EUR credit markets that remain reliant on monetary stimulus, as evidenced by the negative reaction to ECB QE taper talk this week, Bloomberg strategist Simon Ballard writes.

• Outlook for U.S. and EUR monetary policy is dominating investor sentiment this week; mkt cognizant of weak nature of underlying Euro zone macroeconomic fundamentals
  • ECB taper talk lacks credibility and wider bias to credit spreads has lacked conviction
  • U.S. election result remains critical to post Nov 8 outlook for risk assets
• Asian credit firmer overnight on global macro optimism as oil hovers around $50 mark; should help to underpin EUR at open later
• Risk Appetite Model volatility recedes but spread dispersion stays firm
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 114bps (-1bps); Bloomberg Barclays Eur HY index closed at 409bps (-3bps)
• CDX IG closed -0.8bps at 74.60 in overnight session; iTraxx Asia Ex Japan IG currently -0.6bps at 116.0 and iTraxx Australia quoted -1.0bps at 102.67

NEWS

• Corporate News
• EasyJet Suffers First Profit Drop Since 2009 on Terror, Brexit
• BAE Systems Says Trading Consistent With Management Expectations
• DFS FY Adj. Ebitda In Line, Sees Special Capital Return This Yr
• Dunelm 1Q Total LFL Sales Miss Estimates
• BTG Says FY Revenue at Current FX Rates Will Top Expectations
• Estia Now Sees F17 Underlying Earnings Down; Had Forecast Growth

• Financial News
• Deutsche Bank Mismarked 37 Loans Like Monte Paschi’s, Audit Says
• Bank of Queensland profit edges up despite lending slowdown
• IMF Warns of Profit Slump at Indian Banks Amid Surging Bad Loans
• Barclays Private Bankers Said to Defect Before OCBC Takeover
• Credit Suisse to Pay $90 Million Over Asset Disclosures

• Credit Rating News
• Fitch: ASEAN Banks Resilient, But Most Face Negative Trends
• Fitch Affirms NAB’s Mortgage Covered Bonds at ’AAA’/Stable

• Other News
• May Stirs Concern Brexit Comes Before Business for Conservatives
• Fed’s Fischer Says Central Banks Need Fiscal Help to Spur Growth
• Bank Bail-In Advice From First EU Country Ever to Try One Out

ANALYST VIEWS

• Tapering of the ECB’s bond purchase programme anytime soon would be akin to throwing in the towel... We’re hooked on easy money, it’s necessary and we’re likely going to see QE ongoing in some form or other for the medium term: creditmarketdaily.com
• European Banks Upgraded at Citi; Not Priced for Risks Reducing

NEW ISSUES

• Air France-KLM EU400m 6Y 3.75%
• Cariparma EU750m 8Y, EU750m 15Y Covered Bonds
• EIB EU500m 0.25% 9/2029 MS -25
• EIB GBP500m 2.5% 10/2022 Tap UKT +40
• KfW EU1b 1.25% 7/2036 Tap MS -18
• Saxony-Anhalt $750m 3Y Reg S MS +26
• Terna EU750m 12Y MS +57
• Alliance Automotive EU180m 6.25% ’21 Tap 105.5/106
• Argentina EU1.25b 1/2022, EU1.25b 1/2027 Bonds
• 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.