HALISTER1: EU CREDIT DAILY: Politics in Focus; BMW Gains, CMZBK Rises

EU CREDIT DAILY: Politics in Focus; BMW Gains, CMZBK Rises

(Bloomberg) -- Credit-market spreads remain well-anchored, though weaker Asian equity markets overnight reflect the fragility of risk appetite and anemic macro conditions, Bloomberg strategist Simon Ballard writes.
  • Trading volumes could decline today as we head into the weekend and in the run-up to the U.S. election
  • Focus today will be on the U.S. October jobs report; consensus is for +173k non-farm payrolls, revisions to prior months will also be watched
  • Politics continues to dominate GBP credit-market landscape after Thursday’s Brexit lawsuit ruling
    • Continued uncertainty over Brexit may weigh on the pound, denting investor sentiment and further weakening U.K. risk asset valuations
  • Risk Appetite Model firmly focused now on Nov 8 election
  • Bloomberg Barclays Eur-Agg Corporate index closed Thursday at 111bps (flat); Bloomberg Barclays Eur HY index closed at 386bps (-1bps)
  • CDX IG closed -0.4bps at 79.65; iTraxx Asia Ex Japan IG is currently -1.7bps at 116.73 and iTraxx Australia quoted +0.6bps at 107.13
NEWS
  • Corporate News
  • BMW Third-Quarter Profit Gains on SUV Sales in China, Europe
  • Richemont Announces Management Overhaul as Sales Plunge
  • Takata Raises Profit Forecast Amid U.S. Unit Bankruptcy Concerns
  • IAG Sees Avg Ebitdar About EU5.3B/Yr vs Previous View EU5.6b
  • Brunel 3Q Revenue Declines 30%, 2016 Outlook Unchanged
  • Paddy Power Betfair Raises 2016 Underlying Ebitda Forecast
  • Loomis 3Q Sales Miss Estimates; Operating Margin Improves
  • Financial News
  • Tullett Prebon 3Q Revenue Rises 15%; 9-Month Revenue Gains 7%
  • Erste Bank 3Q Net Income Rises 22%; CET1, Risk Provisions Drop
  • Van Lanschot Says 3Q Result in Line With First Two Quarters
  • Commerzbank 3Q Operating Profit Rises vs 2Q, Declines vs 3Q15
  • Credit Suisse’s Cost-Cutting Is Hindered by Rising Risks
  • Rating News
  • S&PGR Revises AMP Ltd. Outlooks To Negative; Rtgs Affirmed
  • Fitch Affirms Australian Covered Bond Ratings on New Criteria
  • Brocades’ Ratings Under Review for Downgrade by Moody’s
  • Other News
  • Fannie-Freddie Shed Risk as Capital Cushion Shrinks Toward Zero
  • Clinton Has Narrow Edge With Five Days Until Election: Poll Wrap
  • Fed Rate Increase Odds Approach 80% as Job Growth Seen Rising
ANALYST VIEWS
  • We are in for an uncertain week, with perhaps a few more after that (as Brexit comes back to the fore). It’s not how we would have wanted the year to come to an end, but it does mean that havens might just hold up at around these levels, yields stay anchored or go lower and returns for fixed- income players hold into year-end (central bank interventions permitting): creditmarketdaily.com
NEW ISSUES
  • BASF EU1b 4Y, EU500m 10Y Bonds
  • Cap Gemini EU500m 5Y MS +52
  • RCI Banque EU750m 5Y MS +60
  • SpareBank 1 SR-Bank EU500m 5.25Y MS +45
  • Virgin Money Holdings GBP230m PNC5 AT1 8.75%
  • Autodis Total EU520m 5.5NC1.5 Fixed, 5.5NC1 FRN
  • Guala Closures EU510m 5NC1 Snr Sec FRN E+475
  • Moscow Domodedovo Airport 5Y Reg S $350m at 5.875%
  • 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.
  • NOTE: Exceptionally, EU Credit Daily will not be published Friday October 28. It will return Monday October 31
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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