Halister News

(To subscribe to EU Credit Daily, click here and set alert via ‘"Display & Edit’’) By Simon Ballard (Bloomberg) -- Credit markets appear to remain in consolidation phase, after Janet Yellen treaded a fine line in her testimony before the House Financial Services Committee. A dovish Fed should support risk appetite, while a cautious macro outlook may feed a continued net widening bias in lower-quality risk assets as investors focus on challenges facing credit fundamentals, Bloomberg strategist Simon Ballard writes.

• The credit mkt’s attempt to rally on Wed. back from earlier wides was soon faded, highlighting the absence of buying conviction even after recent selloff
  • Mkt interpretation of the Fed’s tightening path on one hand, and the “negative rates” debate on the other, will be key balancing act in positioning credit portfolios in coming mos.
  • Uncertain macro outlook, commodity-price volatility and the weight of Fed policy hanging over financial risk assets may leave many corp credit investors fearing that any credit mkt stability/rebounds may be short-lived
• Risk Appetite Model highlights rise in volatility, even as spread dispersion recedes
• CDX IG currently +2.1bps at 120.94 in overnight session; iTraxx Asia Ex Japan IG currently +8.7bps at 172.52

NEWS

• Corporate News
• Nokia Earnings Top Estimates as Mobile Carriers Expand Networks
• Glencore 4Q Copper Output Falls; Announces Franco Streaming Deal
• Total’s Quarterly Profit Beats Estimates on Oil Output, Refining
• Rio FY15 Profit In Line With Est., Dividend Unchanged From 2014
• Pernod 1H Profit Recurring Ops. 2% Below Analysts’ Estimates
• Publicis 2015 Revenue Beats; Modest Organic Growth Seen in 2016
• Woolworths Profit Climbs as Food, David Jones Revenue Increase
• Alcatel-Lucent 4Q Sales, Adj. Op. Income Beat Ests.
• Metro 1Q Ebit Ex-Items Misses Est.; Debt Cut, Outlook Reiterated

• Financial News
• SocGen Fourth-Quarter Profit Misses Estimates on Legal Provision
• Zurich Insurance Quarterly Loss Misses Estimates on Claims
• Union Bank 3Q Net Income Falls 74% Y/y, Misses Est.
• Natixis Increases Bonus Pool by 4%, Mignon Says

• Rating News
• Indonesia’s Growth to Stabilize, Vulnerabilities Remain: Moody’s
• Suncorp Group Rtgs Unaffected By Weaker 1H: S&P
• Moody’s Comfortable With New Zealand Aaa Rating, Stable Outlook

• Other News
• U.S. 10-Year Yield Near One-Year Low as Stocks Drive Safety Bid
• World’s Biggest Wealth Fund Gets Political Pushback in Asset Bid
• Oil Extends Loss From 3-Week Low Amid Record Cushing Supplies

ANALYST VIEWS

• Broadening risk-off and recent increased focus on credit concerns come at a time when markets are increasingly questioning the efficacy of monetary easing: CS
• Session was more than likely a dead-cat-bounce; next stage might well take in some calmer climes before we resume some sort of slide lower: creditmarketdaily.com

NEW ISSUES

• PRICED: EIB EU250m 1.25% 11/2026 Green Bond Tap MS -12
• PRICED: LBBW EU250m 0.375% 1/2019 Tap MS +48
• PRICED: Goldman Sachs EU1.25b 12/2017 FRN 3mE +70
• PRICED: Bpifrance Financement EU500m 5Y FRTR +23
• PRICED: CA Immobilien EU150m 2.75% 7Y Bonds at Par
• 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.