Halister News

(Bloomberg) -- While credit markets have rallied even as the latest aggregate polls on the U.K.’s EU referendum suggest the vote is too close to call, the potential for further volatility remains elevated, Bloomberg strategist Simon Ballard writes.

• Stronger Asian credit markets overnight should underpin Europe at the open; some investors are reducing or hedging GBP risk exposure into strength
• German ZEW survey on macro radar today; median forecast is for reading of 4.8 vs 6.4 in May
• Risk-on sentiment may leave GBP corporate spreads susceptible to sharp widening on Friday if the vote is to leave the union
  • Risk Appetite model pricing in elevated volatility, even as spread dispersion remains anchored
• CDX IG closed +0.4bps to 80.12 in overnight session; iTraxx Asia Ex Japan IG currently -1.7bps to 141.35

NEWS

• Corporate News
• BHP Billiton Raises FY16 Met Coal Target; Trims Thermal Guidance
• Whitbread 1Q Premier Inn LFL Sales Above Ests.
• Petrofac Sees 2016 Net in Line With Previous Forecasts
• Photo-Me FY Pretax Up, to Pay Special Div., Sees FX Uncertainty
• Huber & Suhner Sees ‘Significantly Higher’ 1H Profit
• Mitsubishi Motors to Forecast First FY Loss in 8 Years: Yomiuri
• Kion, Forklift Maker, to Buy Dematic for $2.1 Billion

• Financial News
• Axa Seeks EU2.1b Pre-Tax Cost Savings by 2020, Earnings Growth
• BofA Faces High Stress as Fed Test Verdict Hits With Brexit Vote
• Nordea Rejects Capital Shortfall Speculation After Media Reports
• How Abu Dhabi Megabank Would Square With Rivals in Four Charts
• Rabobank to Close Equity Research and Trading Desks: FD

• Credit Rating News
• S&PGR Rates Korea Land and Housing Upsized MTN Program ’AA-’
• Fitch Revises Outlook on Bangkok Mass Transit Bonds to Negative

• Other News
• Germany’s ECB ‘Brexiteers’ Face Final Ruling on OMT Challenge
• Brexit Vote in Balance as Polls Differ Over Which Side Leads
• ECB Set to Test Attraction of Paying Banks to Take Its Money

ANALYST VIEWS

• If we vote to remain in the EU, we dare say that there there will be another session like the one we saw yesterday -- then things will go back to normal, quickly: creditmarketdaily.com
• S. Europe Banks Exposed Most to Brexit 2nd Round Risk: Bernstein

NEW ISSUES

• Christian Dior EU350m 5Y MS +82
• 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.