Halister News

(Bloomberg) -- There may be another lull in EUR credit market proceedings today as some market participants respect the Yom Kippur holiday, but the overarching supportive tone to credit spreads should persist. Concerns are still evident though -- Brexit/GBP volatility, Deutsche Bank capital uncertainty, U.S. political fragility -- all of which may encourage investors to maintain a selective, bottom-up approach to risk assets, Bloomberg strategist Simon Ballard writes.

• Asia credit markets weak overnight on FOMC speculation; highlights the ongoing susceptibility of risk assets to global rates outlook
• Alcoa earnings late yesterday missed estimates; investor focus to turn to fundamentals with any implied weakness likely to dent Fed rate hike expectations
  • Samsung “fireside chat” saga also damping market sentiment as financial cost estimates rise
• GBP rebound may help buoy sentiment today, although downside risks to currency remain elevated

• Risk Appetite Model volatility declines but spread dispersion highlights ongoing caution
• Bloomberg Barclays Eur-Agg Corporate index closed flat yday at 113bps; Bloomberg Barclays Eur HY index closed at 401bps (-1bp)
• CDX IG closed +0.6bps at 74.96 in overnight session; iTraxx Asia Ex Japan IG currently +1.0bps at 116.16 and iTraxx Australia quoted +0.7bps at 103.67

NEWS

• Corporate News
• Alcoa 3Q Adj. EPS, Rev. Miss Ests; Drops -6.4% Pre-Mkt
• Ericsson Says 3Q Results Significantly Lower Than Company Est.
• Vitol First-Half Profit Said Down 42% as Oil-Trading Boom Ends
• Lawson 1H Profits Slightly Above Targets; Maintains Outlook
• Domino’s Pizza Sees FY Results In Line With Market Ests.
• Telford 1H Profit in Line With Views, on Track to Deliver Growth
• Denka Drops After 1H Profit Miss, Full-Year Forecast Cut
• Toyota Seeks Suzuki Partnership as Japan Carmakers Team Up
• Sprint Seeks to Raise $3.5 Billion From Spectrum, WSJ Says

• Financial News
• Deutsche Bank Said to Increase Size of Private Bond Raising
• UBS Said to Poach Deutsche Bank’s Top Asia Private Bankers
• Saudi Fransi Third-Quarter Profit Drops 1% as Expenses Climb
• Bank Victoria Gains Most in Nearly 6 Mos. After Jump in Earnings

• Credit Rating News
• Australian Economy Shows Resilience to Commodity Drops: Moody’s
• Danske LT Deposit Rating Upgraded at Moody’s; Positive Otlk
• S&PGR Places Rtgs On NN Life Insurance On CreditWatch Negative

• Other News
• May Backs Down on Parliament Vote Over Her Brexit Terms
• Trump’s Attacks on GOP Leaders Ignite Civil War Inside Party
• Investigators Said to Suspect New Flaw in Samsung Note 7

ANALYST VIEWS

• Alcoa report suggests we’re in for another weak quarter on the earnings front from corporate America, which might add some volatility into equities over the next few weeks: creditmarketdaily.com

NEW ISSUES

• Affordable Housing GBP124.5m 2.893% 2043 Tap UKT +36
• Chorus EU500m 7Y MS +110
• CRH Finance DAC EU600m 12Y MS +80
• easyJet EU500m 7Y MS +125
• ESM EU3b 6Y MS -22, EU1b 1.125% 5/2032 Tap MS -13
• KBC Group EU750m 7Y MS +65
• SANEF EU300m 12Y MS +48
• SFIL EU1b 8Y Interp. FRTR +21
• Wendel EU300m 6.5Y MS +98
• DNB Bank $750m PNC5.5 AT1 Notes 6.5%
• 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.