HALISTER1: EU CREDIT DAILY: U.K. GDP; Deutsche, Barclays Surprise; BT Beats

EU CREDIT DAILY: U.K. GDP; Deutsche, Barclays Surprise; BT Beats

(Bloomberg) -- U.K. macro focus will be firmly on the 3Q GDP data due this morning. With consensus looking for +0.3% q/q and +2.1% y/y, credit market reaction to any meaningful deviation from these levels could be sharp. A high print may appease Brexit concerns, bolster risk appetite; weak numbers could highlight macro deterioration, push risk asset spreads wider, Bloomberg strategist Simon Ballard writes.
  • U.K. banks and insurers may lose EU passporting rights after Brexit, according to Trade Minister Mark Garnier; uncertainty may damp near-term price performance in sector
    • Financial sector sentiment may be buoyed Thurs by better-than-consensus Deutsche Bank, Barclays earnings
  • Asian equity, credit markets weaker overnight leading EUR/U.S. equity futures lower; may damp early EUR credit mkt price performance Thursday
  • Risk Appetite Model looking well anchored into end-October
  • Bloomberg Barclays Eur-Agg Corporate index closed unchanged yday at 110bps; Bloomberg Barclays Eur HY index also closed flat at 370bps
  • CDX IG closed +0.7bps at 75.0; iTraxx Asia Ex Japan IG is currently -0.5bps at 115.00 and iTraxx Australia quoted +0.25bps at 102.75
NEWS
  • Corporate News
  • Volkswagen 3Q Profit Beats Est.; FY Forecast Adjusted Higher
  • ABB 3Q Operational Ebita Slightly Beats, Orders Miss Estimates
  • Debenhams FY Rev. In Line, Underlying Pretax Beats Ests.
  • BT 2Q Adj. EPS Beats Ests.; Keeps Outlook Unchanged
  • Telefonica 3Q Oibda EU4.18b; Est. EU4.06b
  • Schneider Electric 3Q Rev. Drops on Middle East; China Improves
  • KPN 3Q Adj. Ebitda Beats Ests.; Keeps Outlook Unchanged
  • Volvo Cars Says 3Q Operating Profit Rises 62%
  • Fresenius SE 3Q in Line, Raises Lower End of FY Guidance
  • Statoil 3Q Adj. Net Falls to Loss vs Est. for Gain; Div. Matches
  • Financial News
  • Deutsche Bank Posts Unexpected 3Q Profit; CET1 Ratio 11.1%
  • Barclays 3Q Underlying Pretax Beats; CET1 Ratio 11.6%
  • BBVA 3Q Net Beats Estimate; Fully Loaded CET1 11%
  • Nomura Beats 2Q Profit Estimate, Trims Interim Dividend
  • DNB Profit Falls Amid Higher Large Corporate Impairment Losses
  • Vontobel Says Assets Under Management Rose on Swiss Clients
  • Rating News
  • S&PGR Affirms Auckland Council ’AA/A-1+’ Rtgs; Otlk Stable
  • NAB Ratings Unaffected By Full-Year Results: S&PGRBulletin
  • Other News
  • Toyota Looks to Uber for Agility Lessons Before It’s ‘Too Late’
  • BOJ Can’t Win as Steps to Spur Loans Risk Slowing Bond Sales
  • Hollande Gets No Love From Voters or Investors on S&P Upgrade
ANALYST VIEWS
  • October supply in IG non-financials has exceeded €20bn...Ytd we are up at €240.5bn. With likely six weeks worth of business to come, €270bn would be a reasonable target (for the) year. Not a record, but only €20bn or so short of the 2009 deluge: creditmarketdaily.com
NEW ISSUES
  • CDC $1b Reg S 3Y MS +29
  • Deutsche Hypo EU250m 4Y Snr Unsecured MS +75
  • EFSF EU2b 0.4% 5/2026 Tap MS -19
  • IFFIm $500m Reg S 3Y FRN 3mL +26
  • Land NRW EU1b 30Y MS +18
  • Merck & Co EU500m 8Y MS +28, EU500m 20Y MS +50
  • Orange EU750m Long 10Y MS +45
  • Slovenia EU1b 24Y MS +90
  • HomeVi EU200m 5Y FRN, EU128m 6.875% 8/2021 Tap
  • Snai EU320m 5NC2 Fixed, EU250m 5NC1 FRN
  • Verizon EU3.25b 3-Part and GBP450m 19Y Bonds
  • 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 Friday October 28. It will return Monday October 31
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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