Halister News

(Bloomberg) -- Underlying tone of credit markets remain constructive heading into summer lull, with ECB’s CSPP providing a backstop bid and the accommodative rates environment fueling appetite for yield, Bloomberg strategist Simon Ballard writes.

• Asian credit mkts have consolidated a little overnight, taking stock after recent market strength
  • Global macro outlook continues to raise questions about path of risk asset fundamentals; but current sentiment may suggest any pullbacks could be shallow and perceived as a buying opportunity
• Key data points to watch today include U.K. June inflation data, German July ZEW data, Goldman Sachs 2Q earnings
• Risk Appetite Model sees a steady start to the week post Nice and Turkey
• CDX IG closed -0.6bps at 76.04 in overnight session; iTraxx Asia Ex Japan IG currently +1.4bps at 119.88

NEWS

• Corporate News
• Novartis Says 2016 Profit May Drop on Entresto Costs, Gleevec
• Volvo Second-Quarter Profit Rises 2.5% Due to Cost Cutting
• Akzo 2Q Revenue Below, Operating Income, EPS Beats Estimates
• Ericsson 2Q Sales, Adj. EPS Miss Ests.; Starts Further Cost Cuts
• Telenor 2Q Ebitda Rises; Cuts 2016 Revenue Growth Guidance
• Verizon’s Proposal to Acquire Yahoo Isn’t Just About the Cash
• Honda Audit Finds Takata Engineers Manipulated Air-Bag Data

• Financial News
• SBAB Sees Reduced Mortgage Competition After Amortization Rules
• Arbuthnot 1H Profit Rises on Transactions, Increases Dividend
• Vietnam’s Eximbank Revises Down 2016 Pretax Profit Target

• Credit Rating News
• Turkey Put on Review for Downgrade by Moody’s After Coup Attempt
• S&PGR Revises Honduras Outlook To Positive; Afrms ’B+/B’ Rtgs
• S&PGR Upgrades Intercorp Peru To ’BB+’, Outlook Stable

• Other News
• Brexit Bargains Scented by Asia’s Rich After Pound’s Plunge
• Banks With Assets No One Wants Undercut India’s Debt Recast Plan
• Canada’s First Negative-Yield Covered Bond May Start a Trend

ANALYST VIEWS

• Santander favored over BBVA ahead of Spanish banks’ 2Q: UBS
• It is absolutely no coincidence that the ECB’s involvement has resulted in a crunch tighter in corporate bond spreads...squeezing valuations higher as paper becomes more scarce: creditmarketdaily.com

NEW ISSUES

• CIBC EU1.25b 6Y Covered Bond MS +6
• JPMorgan EU2b 7.5Y MS +65
• 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.