Halister News

(Bloomberg) -- Global credit focus will likely stay fixed on evolving political risk and rates market gyrations in what will be a holiday-shortened week in the U.S. for Thanksgiving, Bloomberg strategist Simon Ballard writes.

• Italian referendum on Dec. 4 next key political event; defeat for Renzi could spark further political uncertainty, test credit investor sentiment, exacerbated by declining seasonal liquidity
  • German and French elections (2017) also already adding to uncertain political outlook
• Corporate credit spreads poised to open with a cautious tone Monday; govt bonds quiet in Asia overnight, but risk softer as investors take profit for year-end, opportunistic new issuance pressures secondary spreads wider amid declines in liquidity

• Bloomberg Barclays Eur-Agg Corporate index closed Friday at 124bps (+4bps); Bloomberg Barclays Eur HY index closed at 421bps (+7bps)
• CDX IG closed Friday +1.5bps at 76.32; iTraxx Asia Ex Japan IG is currently +2.2bps at 130.69 and iTraxx Australia quoted +0.3bps at 113.33

NEWS

• Corporate News
• Samsung’s Automotive Chief Says Next Decade Will Be Smartcar Era
• Bonmarche Says Confident Will Resume Growth in FY18
• Netcare FY Net Income 1.67b Rand vs 2.41b Rand Year Ago
• Alrosa 3Q Ebitda -25% Q/q to 38.7b Rubles; Est. 38.2b Rubles

• Financial News
• Santander, BBVA Global Push Runs Into Risks From Trump to Brexit
• Arqaam Expects U.A.E. Bank ADCB to Buy UNB in Next 12-18 Months
• AMMB 2Q Net Income 352.6m Rgt vs 382.5m Rgt Y/y

• Rating News
• Asian Corporate Credit Quality to Remain Stable, Moody’s Says
• S&PGR Affirms Boral ‘BBB’ Rtgs; Liquidity Revised To Adequate
• Fitch Affirms Hungary Rating at ‘BBB-’ With Stable Outlook
• Mongolia Rating Cut as Moody’s Expects Elevated Debt Burden

• Other News
• Nomura Sees 2-Year Yield Rising as Traders Face $26 Billion Sale
• U.K. Regulator Outlines Rules for Mobile Spectrum Auction

ANALYST VIEWS

• While no data suggests that the market moves are overdone, bond investors have begun to accept that the ‘old regime’ of low rates has passed... the best asset class to reflect a Trump victory, equities will undoubtedly experience a ‘delayed hit’ from the tightening in monetary conditions and a strong dollar since August. Remain long financials and the dollar: Jefferies
• There have been outflows and the impact of those outflows is disproportionate as far as valuations are concerned for this more illiquid market. The deal backlog is massive, it makes us wince almost as to how spreads might evolve if borrowers become price takers when those deals are printed: creditmarketdaily.com

NEW ISSUES

• Friday was the third zero volume session this month
• European IG credit pipeline here and HY credit pipeline 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.