HALISTER1: EU CREDIT DAILY: Spreads Widen Amid Brussels Explosion; HSBC, DB

EU CREDIT DAILY: Spreads Widen Amid Brussels Explosion; HSBC, DB

(Bloomberg) -- Corporate bond spreads see early widening pressure, amid reports of explosions at Brussels airport. Technicals have remained firm in previous sessions as a decline in liquidity is seen into Easter holidays, despite persistent macroeconomic concerns and price volatility among miners and commodity producers, Bloomberg strategist Simon Ballard writes.
  • Reports of Brussels explosions fueling defensive bias this morning; synthetic indexes first to react wider, initial market liquidity probably very poor
    • Elsewhere, beware the ability of political uncertainty to weaken investor sentiment, amid U.K. EU membership debate, Trump’s protectionist rhetoric overnight
  • ECB CSPP seen as medium-term pillar of support for EUR corp credit valuations, although program details yet to be released
    • This should underpin buy-and-hold nature of asset class, but some investors may see value in hedging long credit risk with short equity exposure due to specter of renewed macro-fueled equity mkt volatility
  • Credit market volatility remains elevated as highlighted by Risk Appetite model
  • CDX IG currently -0.3bps at 77.53 in overnight session; iTraxx Asia Ex Japan IG is currently -0.7bps at 149.64
NEWS
  • Corporate News
  • Wolseley Sees FY Trading Profit In Line With Consensus Estimates
  • Airbus in Talks With Bharat Forge, Mahindra to Forge Parts: ET
  • Jimmy Choo 2015 Adj. Ebitda In Line, Sees Growing Faster Vs Mkt
  • Financial News
  • HSBC Said to Take Loss on Irish Oil Minnow Loans as Pain Spreads
  • Deutsche Bank at Risk of Moody’s Cut on Struggle to Overhaul
  • IG Group 3Q Rev Rises 18% to Record, Began 4Q In Strong Position
  • Credit Rating News
  • Woodside’s Baa1 Rating Confirmed With Negative Outlook: Moody’s
  • S&P Affirms S-Oil Rating At ’BBB’; Outlook Stable
  • Low Oil Prices to Slow Growth in GCC Countries in 2016: Moody’s
  • S&P Affirms New Zealand Credit Ratings, Outlook Remains Stable
  • Other News
  • Europe’s Junk Market Faces New Crisis If U.K. Votes for ‘Brexit’
  • BlackRock Says There Won’t Be a U.S. Recession, Cut Treasuries
ANALYST VIEWS
  • ECB will probably aim for up to EU2b a month in purchases, which would amount to much noise and not a whole lot of action in reality, but enough to frustrate investors and still distort the market in favor of lower spreads: creditmarketdaily.com
NEW ISSUES
  • HeidelbergCement EU1b 7Y bonds at MS +205
  • 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: EU CREDIT DAILY will not be published from March 24 to April 8. Publication will resume April 11.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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