Halister News

(Bloomberg) -- Overnight gains in Asian credit markets, with the exception of China after this week’s poor export data, may buoy sentiment in EUR risk assets at the open today. Still, prevailing concerns including persistent GBP weakness may constrain near-term performance, Bloomberg strategist Simon Ballard writes.

• Global macro growth uncertainty, hard/soft Brexit debate and the specter of a potential Fed rate rise in December combining to persuade some investors to scale back risk exposure
  • EU President Tusk’s comments that “the only real alternative to a hard Brexit is no Brexit” could further dent GBP credit-market dynamics
  • But while equities and synthetic credit indexes have traded weaker this week and GBP credit softer, EUR and USD corporate spreads remain well anchored
• Risk Appetite Model trades sideways as we head towards weekend
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 114bps (+1bp); Bloomberg Barclays Eur HY index closed at 400bps (flat)
• CDX IG closed +0.4bps at 76.13 in overnight session; iTraxx Asia Ex Japan IG currently -0.5bps at 117.00 and iTraxx Australia quoted -0.3bps at 103.92

NEWS

• Corporate News
• Samsung Forecasts $5.3 Billion Profit Impact From Note 7 Crisis
• China Said to Be Planning Mega-Merger of Sinochem, ChemChina
• Software AG 3Q Non-IFRS EBITA EU66.8m, Confirms 2016 Forecast
• Infosys Cuts Sales Forecast Again as Clients Trim Spending
• HP Plans Up to 4,000 Job Cuts Over Three Years Amid PC Slump
• VW Fails to End Europe Market-Share Decline a Year After Crisis
• Swisscom Says It Must Diversify to Halt Revenue Slide: Le Temps

• Financial News
• Man Group 3Q FUM Up 6%, Buys Alto Real Estate Investment Manager
• Credit Suisse Hires Industrials Banker Wortendyke From Citi
• UniCredit May Plan Maximum Capital Increase of EU13b: Repubblica

• Credit Rating News
• Ericsson Cut to Baa2 by Moody’s; On Review for Further downgrade
• Caesars Rating Outlook to Stable From Negative by Moody’s
• Newcrest’ Outlook Moved to Positive From Stable by Moody’s
• Cheung Kong Property’s Rating Upgraded to A2 by Moody’s

• Other News
• Draghi Sends Corporate Yields So Negative the ECB Can’t Buy Them
• EU sees record September car sales after 7.2-per-cent jump

ANALYST VIEWS

• It has been a difficult week for risk assets with little chance of a break to the upside emerging and most content to stay sidelined or reduce some risk. It’s almost as if we are in that slipstream into central bank policy change. We are not: creditmarketdaily.com

NEW ISSUES

• Bank of Montreal EU1.75b 7Y Covered MS +2
• FMS Wertmanagement EU1.5b 4Y MS -20
• Goodman European EU325m 6Y MS +97, EU325m 10Y MS +130
• IB Schleswig-Holstein EU500m 4Y FRN 3mE -5
• KfW GBP250m 1.125% 12/2019 Tap UKT +29
• Banco De Sabadell EU1b 7Y Covered MS +10
• SAGESS EU600m 12Y Interpolated FRTR +29
• Warner Music Group EU345m 8NC3 at Par to Yield 4.125%
• 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.