HALISTER1: EU CREDIT DAILY: Policy Expectation; Aussie AAA Threat, AUH Bank

EU CREDIT DAILY: Policy Expectation; Aussie AAA Threat, AUH Bank

(Bloomberg) -- European credit mkts likely to be muted today in terms of volume, due to July 4 holiday across Atlantic, even as n-t tone remains firm. Expectations of potential additional BOE policy accommodation and ongoing ECB CSPP bid should both underpin European credit spreads, Bloomberg strategist Simon Ballard writes.
  • Asian equities and EUR equity futures trading higher this morning, also indicating firm tone to EUR risk assets at the open
  • Brexit and global macro weakness still overhang global risk asset outlook
    • May continue to create pockets of weakness in sentiment and corp bond price/spread volatility
    • Investors may favor barbell combination of haven assets (compressing yields) and risk/incremental yield; a self- fulfilling cycle
  • Risk Appetite model tracking 2010 in terms of vol and spread dispersion
  • iTraxx Asia Ex Japan IG currently -2.3bps at 138.06
NEWS
  • Corporate News
  • Tata Motors Rises After Report JLR U.S. Sales Climb in June
  • Hitachi Zosen Eyes M&A to Beef Up Energy-From-Waste Business
  • Volkswagen Could Cut Labor Costs by Semi-Retirement: SZ
  • Financial News
  • Abu Dhabi’s NBAD and FGB to Merge Forming $175 Billion Bank
  • Brexit Has Euro Outsiders Fearing Banking Fallout, Denmark Says
  • Sumitomo Mitsui Beefs Up Loan Distribution as Yen Yields Vanish
  • Credit Rating News
  • Aussie Drops as AAA Rating Seen Threatened by Unclear Election
  • S&PGR Affirms Fiji ’B+/B’ Ratings; Outlook Remains Stable
  • Other News
  • RBA Seen in Wait-and-Watch Mode as Vote, Brexit Unrest Play Out
  • Brexit Stock Drop Not Over for Norway Manager With $10 Billion
  • Norway’s Junk Bond Market Faces Second Wave of Restructuring
ANALYST VIEWS
  • The ECB has lifted just shy of €5bn in two weeks, which has surely helped support the IG corporate bond market and reduced material weakness and much volatility. It will continue to do so: creditmarketdaily.com
NEW ISSUES
  • Santander UK GBP500m 3Y Covered FRN 3mL +48
  • 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.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Topics
Leveraged Finance

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