HALISTER1: EU CREDIT DAILY: Markets Await NFP; Arcelor Drops, Goldman Cuts

EU CREDIT DAILY: Markets Await NFP; Arcelor Drops, Goldman Cuts

(Bloomberg) -- European credit markets may open with a weaker bias after RBA cuts inflation forecast, but trading may be subdued again after yesterday’s holiday and ahead of U.S. non-farm payrolls data, Bloomberg strategist Simon Ballard writes.
  • Headlines and results from U.K. regional and London mayor elections likely to damp GBP credit market volumes; broad picture of results not expected until this evening at earliest
  • Asian equities and ITraxx weaker with A$ lower and govt bonds bid as RBA sees CPI below mid-point of its target range for some time
    • Other key macro data points today: German April Construction PMI, Spain industrial output
  • Risk Appetite model posts small rise in spread dispersion, reflecting investor caution, while volatility element remains anchored
  • CDX IG closed -0.1bps at 84.43 in overnight session; iTraxx Asia Ex Japan IG is currently +1.1bps at 145.32
NEWS
  • Corporate News
  • ArcelorMittal Profit Drops 33% After Steel-Price Collapse
  • Kraft Heinz Beats Earnings Estimates as Condiment Sales Grow
  • InterContinental Hotels 1Q Revpar In Line With Estimates
  • Smurfit Kappa 1Q Revenue, Ebitda In Line With Estimates
  • Formosa Petrochemical April Sales Fall 22% Y/y to NT$42.7b
  • Financial News
  • Macquarie’s Record Profit Run May Be Ending as Challenges Mount
  • Goldman Said to Extend Fixed-Income Job Cuts to 10% of Staff
  • Credit Rating News
  • Fitch Affirms ASB’s Covered Bonds at ’AAA’; NZD2.0bn Loans Added
  • Other News
  • Global Plunge in Yields Undercuts Fed Interest Rate Warnings
  • Shadow Lending Crackdown Seen Forcing China Banks to Sell Bonds
ANALYST VIEWS
  • We’re into uncharted waters, but it has left the corporate bond market -- in Europe -- to establish itself as a core, necessary income boosting asset class: creditmarketdaily.com
NEW ISSUES
  • Travis Perkins GBP300m 9/2023 bonds at 4.5% yield
  • 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.
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Source: BFW (Bloomberg First Word)

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