HALISTER1: EU CREDIT DAILY: Uncertainty Persists; Yellen Testimony in Focus

EU CREDIT DAILY: Uncertainty Persists; Yellen Testimony in Focus

(Bloomberg) -- EUR credit markets opening with a widening bias in wake of net weakness seen in Asia and lower oil prices; macro and political uncertainties continue to test confidence in risk assets even as the rates selloff abates, Bloomberg strategist Simon Ballard writes.
  • More clarity on U.S. rates outlook, particularly the prospect of a December rate rise, could come from Fed Chair Yellen’s testimony Thursday to House Joint Economic Committee
    • Fed funds futures market currently a 94% for hike next month
  • Bloomberg Barclays Eur-Agg Corporate index closed Wednesday at 118bps (+2bps); Bloomberg Barclays Eur HY index closed at 411bps (+4bps)
  • CDX IG closed Wednesday -0.2bps at 75.29; iTraxx Asia Ex Japan IG is currently +4.3bps at 127.57 and iTraxx Australia quoted +0.6bps at 110.67
NEWS
  • Corporate News
  • Ahold Third-Quarter Profit Misses Estimates After Merger
  • Royal Mail 1H Adj Operating Profit Falls, Cost Cut Target Rises
  • CRH Maintains FY Ebitda Guidance of In Excess of EU3b
  • Henkel Sets 2020 Financial Goals; 2%-4% Avg Organic Sales Growth
  • VW Loses More European Market Share as Scandal Effect Lingers
  • Shanks Group Sees FY Reported Results Benefiting From Weak GBP
  • Financial News
  • Dexia Reports 3Q Net of EU309m; CET1 Ratio Climbs to 17.2%
  • Investec 1H NII Rises, 3rd Party AUM Increases 17%
  • Julius Baer 10-Month AUM Rise 9% YTD to Record CHF327b
  • Bank Hapoalim Third-Quarter Profit Drops 13% on DOJ Provision
  • NN Group Says Continues to Deliver On Its Targets in 3Q Update
  • Mediobanca Buys Esperia Amid Plan to Expand Wealth Management
  • Rating News
  • Fitch Rates CBA’s AUD2.3bn Covered Bonds ’AAA’; Outlook Stable
  • S&PGR Places Financiera Finca Ratings On Watch Developing
  • Other News
  • BOJ Fires Warning at Bond Market With Unlimited Buying Plan
  • BlackRock, Pimco Issue Inflation Warnings Ahead of TIPS Auction
  • Turkey Central Bank Changes Reserve Rules to Boost FX Liquidity
  • China Steel Exports to Remain at ~100m Tons in 2017: Fitch
ANALYST VIEWS
  • We are at about the most uncertain period for market direction than at any stage this year (and) it does seem like we are going to trade with a little volatility for the next few months: creditmarketdaily.com
  • Stick to mantra of “no experiments in Q4”, and enter the last weeks of the year holding defensive stance built around an overweight of CSPP-buying candidates. Consistent with long-held preference for credit risk over duration, stick to the outer rim in terms of ratings: Commerzbank
NEW ISSUES
  • Akelius Residential EU600m 1/2022 MS +145
  • APRR EU500m 1/2027 MS +67, EU500m 1/2031 MS +102
  • Caja Rural De Navarra EU500m 7Y Covered MS +27
  • Commerzbank EU500m 2/2023 Covered MS -12
  • Eastman Chemical EU200m 1.5% 2023 Tap, EU500m 10Y
  • ING Groep $1b PerpNC5.5 AT1 6.875% Coupon
  • Land NRW $750m 2Y FRN 3mL +17
  • Pension Insurance Corp GBP250m 10Y Tier 2 8% Coupon
  • European IG credit pipeline here and HY credit pipeline 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.
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Source: BFW (Bloomberg First Word)

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