Halister News

(Bloomberg) -- GBP and EUR credit markets have performed strongly this week on optimism today’s BOE meeting will send out a dovish message and the new U.K. political administration will enable a smooth transition, Bloomberg strategist Simon Ballard writes.

• Combination of ECB bond-buying and declining seasonal liquidity likely to underpin demand-supply dynamics in the near term across European credit markets
  • Risk appetite is still susceptible to headline risk, including any surprise hawkish bias today from the MPC, political uncertainty across EU as Brexit discussions loom
• 2Q16 U.S. corporate earnings also becoming a key driver of market sentiment; Blackrock, JPM due later today; Citi, Wells Fargo, US Bancorp tomorrow
• Risk Appetite Model now deviating from 2010 path as risk-on mood drives volatility and spread dispersion lower again
• CDX IG closed +0.4bps at 76.37 in overnight session; iTraxx Asia Ex Japan IG currently -1.3bps at 124.13

NEWS

• Corporate News
• Ahold, Delhaize Reach Pacts to Divest 86 Stores in U.S.
• Hays 4Q Net Fees Rise; U.K. Net Fees Slowed on EU Referendum
• TSMC Profit Tops Estimates as China Phones Make Up for Apple
• UK Mail 1Q Performance in Line With Prior Views
• Mothercare 1Q U.K. LFL Sales Up 1.2%, Hasn’t Seen Brexit Effect
• Halfords 1Q Retail LFL Sales, Cycling LFL Fall, Autocentres Up
• Norwegian Air 2Q Revenue, Net Beat Ests; Raises ’16 CASK Outlook
• Aeropostale Reports 1Q Loss
• Kvaerner 2Q Net Beats Ests.; Sees Margin Improving in 2H Y/y
• Fast Retailing Cuts Profit Forecast 3rd Time This Year
• BHP Billiton Says Samarco Unlikely to Resume Operations in 2016

• Financial News
• SEB 2Q Net Income Tops Estimates; Fee Income Below Ests.
• Ashmore 4Q AUM Rises $1.3b; Net Outflows in Quarter $0.7b
• Moneysupermarket 1H Rev. Rises 10%, Confident on FY Outlook
• Deutsche Bank Names Dupree to Run Americas M&A, Shuffling Ranks
• Storebrand 2Q Premium Income, Net Rise; Sees Dividend for 2016

• Credit Rating News
• Australian Banks Face Rising Challenges, Moody’s Says
• APAC Geopolitical Risks Rise But Not a Ratings Driver Yet: Fitch
• Fitch Affirms Indonesia’s Telkom at ’BBB-’; Outlook Stable

• Other News
• Bank of England Rate Cut in Focus as Brexit Rattles Economy
• May Draws Line Under Cameron Era as Johnson Named to Brexit Team
• Juncker Confident of Building Stronger EU Partnership With U.K.
• Bernanke Visit Sees Bond Market Shrug Off Helicopter Money Calls

ANALYST VIEWS

• The heavy hand of the ECB (is) manipulating it all...so position for it. The hidden subliminal message is to take risk: lower in quality, and longer in duration - positioning for high/low beta compression: creditmarketdaily.com

NEW ISSUES

• State Of Hessen EU500m 0.25% 6/2025 Tap MS -12
• AFD EU1.5b 10Y FRTR +17
• Zurich Insurance $1b PNC5.5 at Par, 4.75% Coupon
• 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.