Halister News

(Bloomberg) -- Europe credit markets little changed after Fed meeting minutes showed officials were divided over the urgency to raise U.S. interest rates, Bloomberg strategist Simon Ballard writes.

• Synthetic indexes may come under some near-term widening pressure as fragility of macro and rates outlooks drive cautious, low risk investor bias
• Corp earnings data highlights weak growth metrics, credit fundamentals; expectations being manipulated lower, suggests headline ’surprise’ numbers may be misleading
  • S&P500 2Q earnings surprise +4.06%, sales surprise +0.56%; but earnings growth -3.74%, sales growth -0.24%
• CDX IG closed +1.0bps at 76.14 in overnight session; iTraxx Asia Ex Japan IG currently -0.6bps at 113.94 and iTraxx Australia quoted -1.2bps at 101.88
• Risk Appetite Model camped in risk on territory as volatility fades

NEWS

• Corporate News
• Kingfisher 2Q U.K. B&Q Sales Beat Ests., France Misses
• NKT 2Q Pretax In Line; Plans New Organizational Structure
• Sixt 1H Revenue, Pretax Earnings Rise, Confirms FY Outlook
• DFDS 2Q Ebit Beats Estimates; Outlook and Dividend Raised
• BAM 1H Net Rises, Rev. in Line; Sees 2016 Adj. Result Above 2015
• Swire Prop 1H Underlying Profit HK$3.56b vs HK$3.94b Yr Ago
• DP World First-Half Profit Climbs 53%; Set to Meet Expectations
• Nestle 1H Organic Sales Growth 3.5% vs Est. 3.7%, Keeps Outlook
• Downer Lowers FY17 NPAT Target After Trains Contract Bid Fails
• Evraz 1H Ebitda Falls 38% Y/y to $577m; Est. $598m
• DNO Posts 2Q Profit as Operated Production Increases

• Financial News
• Rabobank Profit Falls 39% on Legal and Restructuring Costs
• Raiffeisen 2Q Net Income Below Est.; Outlook Remains Unchanged
• Standard Bank First-Half Profit Ex-Items Rises 5%
• ANZ Says Among Banks Named U.S. Class Action Complaint

• Credit Rating News
• S&P Sees ‘Significant Concern’ for Japan Banks Under Minus Rates
• Sharp Upgraded to B- From CCC+ at S&P, Outlook Positive
• Brambles Rtg Unaffected By Changes In Snr Mgmt: S&PGR
• Tasmania’s Credit Rating Cut One Level by Moody’s to Aa2

• Other News
• Hong Kong Stocks Rally to Nine-Month High on Earnings Optimism
• Moody’s Sees Japan Economy Up by 0.7% in 2016, 0.9% in 2017

ANALYST VIEWS

• Euro credit markets continue to bounce back strongly following a difficult start to the year, with high grade rallying on the back of ECB purchases and high yield picking up after Brexit: CreditSights

NEW ISSUES

• ASB Finance GBP250m 9/2020 UKT +95
• EIB EU300m 1% 3/2031 Tap MS -24
• Kommunekredit $1b 3Y Reg S MS +14
• Land NRW EU250m 0.625% 7/2031 Tap MS -1
• 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.