Halister News

(Bloomberg) -- With the combination of declining seasonal credit mkt activity, a mixed corp earnings picture and recent geopolitical events still fresh in the mind, it is unsurprising corp bonds are currently experiencing a degree of spread consolidation, Bloomberg strategist Simon Ballard writes.

• Earnings focus this morning likely on Electrolux AB and Iberdrola SA; Morgan Stanley last of U.S. bank majors to report later along with Intel and American Express
  • Macro data radar includes euro area consumer confidence, U.K. employment and German PPI
• Risk Appetite Model shows modest seasonal consolidation as spread dispersion edges higher
• CDX IG closed +0.3bps at 76.35 in overnight session; iTraxx Asia Ex Japan IG currently +1.2bps at 120.88

NEWS

• Corporate News
• Electrolux 2Q Operating Profit Beats Estimates, Sales Miss
• SAP Profit Tops Estimates as Clients Move to New Software Suite
• Fortum 2Q Sales Beat Ests; Nordic Demand to Grow 0.5% Annually
• TalkTalk 1Q Rev. Flat, Keeps FY Guidance Unchanged
• Johnson Matthey FY Outlook at Constant Rates Remains in Line
• Villeroy & Boch 1H Revenue Rises 3%; Confirms 2016 Targets
• Clinigen Says FY Revenue Grew 87% Y/y, Debt Decreased
• VW Emissions-Cheating Claims Reach Back Further in New Lawsuits
• Severn Trent Progress Continues With Water Plus Joint Venture
• Iberdrola 1H Ebitda EU3.89B; Est. EU3.85B

• Financial News
• Citigroup’s Fujita Resigns as Japan Vice Chairman, Memo Shows
• Nordea’s Interest Income Drops as Negative Rates Take Toll
• Monte Paschi Weighing Sale of Antonveneta to UBI: Corriere
• Pimco Names Man Group’s Chief Emmanuel Roman as Its New CEO

• Credit Rating News
• Moody’s Expects UK Banks’ Solvency Ratios To Remain Solid
• SoftBank Ba1 Rating Affirmed at Moody’s; Can Handle ARM Impact
• S&PGR Affirms India EXIM ’BBB-’ Issue Rating On Notes

• Other News
• Brexit Means Business as Companies Turn to Consultants for Help
• Donald Trump Formally Nominated as GOP Presidential Candidate

ANALYST VIEWS

• Chinese industrial sector is no longer the domain of heavy industry. Recent $ bond issuers include a car rental firm, a sportswear maker and a manufacturer of health supplements. Does this reflect China’s shift to new economy?: CreditSights
• We let the process of the ECB’s mega grabfest play out supporting the corporate bond market over the summer months as the unlimited buying power of the central bank sucks the life out of the market: creditmarketdaily.com

NEW ISSUES

• KfW EU1b 1.25% 7/2036 Tap MS -15
• Spain EU6b 10Y MS +95
• Wells Fargo GBP1b 9Y Senior UKT +130
• WL Bank EU250m 0.75% 2/2026 Covered Tap MS -10
• 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.