Halister News

(Bloomberg) -- Spreads look set to close the week with a cautious tone in both primary and secondary segments with Asian risk weaker overnight amid ongoing global macro and Brexit uncertainty, Bloomberg strategist Simon Ballard writes.

• Primary market may be losing a little sheen given that the new Deutsche Bank T2 deal was unable to come tighter than IPT
  • The ECB’s corporate-sector purchase plan should fuel renewed buoyancy for risk assets in coming months, notwithstanding the risk of heightened market volatility as we approach the U.K. EU referendum on June 23
  • Consolidation in corporate spreads may have further to run near term
• Risk Appetite Model sees volatility element drop to 21.77%, while spread dispersion continues to edge higher

• CDX IG currently -0.2bps to 81.38 in overnight session; iTraxx Asia Ex Japan IG is currently +1.1bps at 144.41

NEWS

• Corporate News
• VW’s European Market Share Slumps to Five-Year Low on Scandal
• Rusal’s Profit Increases as Weakening Ruble Helps Cut Costs
• Coca-Cola HBC 1Q Net Sales Rev. Down 2.7%, Volume Up 0.1%
• Romania’s Romgaz 1Q Net Income Declines 13% on Lower Gas Demand
• AB Inbev, Ambev Agree to Exchange Some Businesses in Latam
• ERG 1Q RC Ebitda EU163m Rises 46% Y/y; Sees FY Ebitda ~EU440m
• Hitachi Reports Full-Year Group Earnings Results (IFRS)
• Sixt 1Q Sales Rise 16%; Pretax Gains 11%; Net Income Drops 16%
• Bouygues 1Q Rev. Matches Ests.; Confirms Full-Year Outlook

• Financial News
• Mizuho Sees Profit Dropping 11% as Negative Rates Erode Margins
• Handlowy 1Q Net 104.4m Zloty; Analyst Est. 109.5m Zloty
• Nedbank Finalizing Banco Unico Stake Purchase: Business Report
• Storebrand ASA: Capital Mkts Day 2016, updated fin’l targets

• Credit Rating News
• S&PGR Rates Japan Post Bank ’A+/A-1’; Outlook Negative
• China Coal, Steel Issuers’ Risks Rise on Reliance on CP: Fitch

• Other News
• BlackRock Lures $1 Billion to Bond ETFs in Japan on Minus Rates
• India Eases Limits on Foreign-Bank Stakes in Private Lenders
• Banks, Bond Buyers Applaud as EU Softens Trade Transparency

ANALYST VIEWS

• Credit markets are chugging along, showing moderate, albeit understandable weakness under a deluge of issuance: creditmarketdaily.com
• UniCredit Capital Target Looking a Bit Less Safe: Barclays

NEW ISSUES

• Bpifrance EU600m 0.75% 10/2021 Tap FRTR +19
• Deutsche Bank EU750m 10Y Tier 2 MS +400msg
• KfW EU1b 8Y Green Bond MS -24
• Schleswig-Holstein EU250m 10Y MS -4
• Suez EU500m 12Y MS +65
• TSKB $300m 5Y Reg S Green Bond MS +387.5
• Unite (USAF) II GBP125m 3.921% 6/2025 Tap UKT +145
• WL Bank EU250m 0.875% 1/2030 Covered Tap MS +5
• 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.