Halister News

(Bloomberg) -- Improved sentiment towards financials is giving a lift to risk asset markets, helping spreads reverse some of the widening from earlier this week while primary market activity picks up. Follow-through from OPEC oil ministers agreeing surprise output cap in Algiers yesterday could also now be instrumental in underpinning risk asset pricing through the end of the week, Bloomberg strategist Simon Ballard writes.

• Asian equity/credit stronger overnight, Yen weaker as oil price buoyed by OPEC deal; positive lead for European risk this morning
  • Macroeconomic backdrop remains an anchor for corporate bonds; notwithstanding recent volatility in govt bonds, dovish central bank rhetoric continues to fuel hunt for yield trade
• Financials still in spotlight despite Deutsche Bank stability; focus now on Wells Fargo as calls mount for CEO Stumpf to resign
• Risk Appetite Model finds degree of stability as Deutsche Bank fears fade
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 114bps (unchanged); Bloomberg Barclays Eur HY index closed at 416bps (-2bps)
• CDX IG closed -1.7bps at 75.37 in overnight session; iTraxx Asia Ex Japan IG currently -2.1bps at 116.25 and iTraxx Australia quoted -1.8bps at 102.50

NEWS

• Corporate News
• Green Dragon Gas 1H Shows Net Loss; Cash From Operations Ahead
• Merlin YTD Revenue Growth 10.6%; Still Positive on M-T Outlook
• Vernalis FY Revenue Declines, Oper Loss Widens on Higher Costs
• Glaxo to Sell Rest of Stake in South African Drugmaker Aspen
• Opel CEO Says 1H Break-Even Shows Profit Strategy Works
• LG Household Falls; NH Sees Slower 3Q Earnings on Stricter Rule
• Solvay Targets $505 Million Boost From Extended Efficiency Drive
• BMW to Build on Electric Line-Up, Sales Chief Robertson Says
• Abertis Weighs Buying CDC’s 15% Stake in Sanef: Expansion
• BlackBerry, Inventor of ‘CrackBerry,’ Stops Making Phones
• Novo Nordisk to Cut 1,000 Jobs to Battle Diabetes Competition

• Financial News
• Deutsche Bank Said to Face Hurdle Moving China Sale Proceeds
• ING Restructuring May Affect 4,000 Jobs in Belgium: La Capitale
• Li Ka-Shing Confident in Postal Savings Bank of China
• Bendigo Bank acquires Keystart loan portfolio, kicks off SPP

• Credit Rating News
• S&PGR Downgrades Freeport-McMoRan To ’BB-’; Outlook Stable
• S&PGR Affirms Yankee Stadium LLC Debt, Rtg On CWPos

• Other News
• ‘Hard Brexit’ Looms as 28 Red Lines Turn Deeper Shade of Scarlet
• Fed’s George Says Fed Needs to Raise Rates ‘Slowly but Surely’
• Stumpf’s Pay Cut Eclipsed by Fury as Yellen, State Join In

ANALYST VIEWS

• OPEC surprise agreement to cut production...reaction could be stronger in the $-space... (but also) suggest that €- investors take advantage of near-term support to further lighten up on fundamentally weaker Oil & Gas names, and keep overall marketweight: Commerzbank
• After the storm, likened to a hurricane as far as Deutsche Bank is concerned, comes the calm; the rally in the underlying over the past few sessions (is) helping total return investors feel good about the performance this month/quarter/year to date: creditmarketdaily.com

NEW ISSUES

• BASF GBP250m 7Y UKT +67
• CK Hutchison Finance EU1b 8Y MS +90
• EIB EU500m 11/2037 Climate Awareness Bond MS -10
• EnBW EU725m 60.5NC5.5 Hybrid 3.5%
• FMS Wertmanagement $425m 5/2018 FRN Tap 3mL +2
• France EU4b 7/2047 I/L OATei +16
• SocGen EU500m 5Y Green Bond MS +30
• Veolia Environnement EU600m 7Y, EU500m Long 12Y
• Romania EU1b 2.875% 5/2028 Tap 2.15%
• Union National Bank $600m 5Y MS +170
• 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.