FIXED INCOME
RESEARCH
René L. Robert
Head of Group
Michael F. Brown
Head of Research
Chris M. Stehli
Market Analyst
Mark T...
Sovereign-Debt Snapshot
European Benchmark Sovereign Bonds
Country Maturity (Years) Yield Previous Spread Under/Over U.S. ...
ADI Indexes
DATA CHECK:
iShares Barclays Capital iShares Euro High Yield UCITS
NAV as of 12/20/2016, 129.74 NAV as of 12/2...
Advantage Data European Summary 12-20-16
Advantage Data European Summary 12-20-16
Advantage Data European Summary 12-20-16
Upcoming SlideShare
Loading in …5
×

Advantage Data European Summary 12-20-16

148 views

Published on

  • Be the first to comment

  • Be the first to like this

Advantage Data European Summary 12-20-16

  1. 1. FIXED INCOME RESEARCH René L. Robert Head of Group Michael F. Brown Head of Research Chris M. Stehli Market Analyst Mark T. McKenna Market Analyst Sean W. Quinlan Market Analyst David L. Chau Market Analyst Minh T. Vo Quantitative Analyst BOSTON One Federal Street Floor 25 Boston, MA 02110 TEL: 617.261.9700 FAX: 617.261.9696 NEW YORK 244 Madison Avenue Suite 233 New York, NY 10016 TEL: 212.227.8870 FAX: 212.208.3059 LONDON 155 Minories, Suite 140 London EC3N 1AD UK TEL: +44 (0) 207.096.0983 FAX: +44 (0) 871.251.0863 EUROPEAN BOND RESEARCH December 20, 2016 Bond Markets Investor confidence was present on Tuesday, as high-yield debt outperformed high-grade corporate bonds. Monday’s incidents in Turkey and Germany did not disrupt the market significantly, but caused a slight weakening of the Euro. Instead, the U.S. dollar strengthened as investors pulled money out of gold and into the dollar. European benchmark indices closed with net gains throughout the board. The Dow Jones is expected to reach 20,000 on Tuesday - a new record. Also, oil prices rose slightly. Major earnings reports are expected on Tuesday, including Nike and FedEx. The markets were in favor of high-yield corporate bonds, which advanced over their investment-grade counterpart, as the major European indices closed the day with net gains across the board. The Euronext 100 was Tuesday’s biggest winner, with a +0.67% gain, marking a +2.82% net gain on the year. England’s FTSE 100, France’s CAC 40, and Germany’s DAX closed with gains of +0.38%, +0.58%, and +0.33%, respectively. Tuesday was a significant day for U.S. equities as well; the Dow Jones Industrial was 0.59% away (as of 12 PM ET) from reaching the 20,000 point milestone - an all time high. Investors seemed to ignore recent political tensions, as the recent assassination of Russian ambassador to Turkey Andrey G. Karlov, and the Berlin Christmas market incident did not seem to skew the markets significantly. However, the value of the Euro fell roughly -0.09% to the U.S. dollar, possibly due to the events in Ankara and Berlin. As the U.S. dollar strengthened, gold fell. Spot gold was down -0.9%, and gold futures fell -1.1%. Brent crude oil prices rose $0.31 and West Texas Intermediate futures rose $0.12 as of 12 pm ET. Some experts claim that the draw in crude oil stocks could signify the global oversupply of oil is starting to shrink. Nike and FedEx are both expected to release earnings today after the U.S. markets close. ADI (Advantage Data Inc.) extensive corporate-bond index data showed high-grade bonds edged out high-yield debt in net price gains linked to trades. Among high-yield bonds showing a concurrence of top price gains at appreciable volumes, Allegion PLC (USD) 5.875% 9/15/2023 made some analysts' 'Conviction Buy' lists. (See the chart for Weatherford Intl. bonds, next page.) Sean Quinlan   squinlan@advantagedata.com  AdvantageData
  2. 2. Sovereign-Debt Snapshot European Benchmark Sovereign Bonds Country Maturity (Years) Yield Previous Spread Under/Over U.S. Treasuries Year Ago France 10 0.710 0.772 -183.2 -131.9 Germany 10 0.247 0.317 -229.5 -166.0 Italy 10 1.833 1.886 -71.0 -64.4 Netherlands 10 0.397 0.457 -214.5 -150.6 Spain 10 1.378 1.451 -116.5 -52.3 U.K. 10 1.256 1.294 -128.6 -37.6 U.S. 10 2.542 2.591 ... Credit-Default Swap Market LATEST NEWS: Top moves, daily sovereign tighteners (5Y): Sweden 22 bp and Czech Republic 42 bp. Daily sovereign wideners (5Y): Spain 83 bp and France 40 bp. New Issuance New Issues New Issues [Continued] 1. Greenland Global Investment (USD) 4.375% 12/22/2019 (12/19/2016):180MM Senior Unsecured Notes, Price at Issuance 98.552, Yielding 4.9%. 2. Landshypotek Bank AB (SEK) 0.065% 1/15/2019 (12/19/2016): 300MM Senior Unsecured Notes. 3. Cifi Hldg Group (USD) 5.5% 1/23/2022 (12/19/2016): 285MM Senior Unsecured Notes, Price at Issuance 100, Yielding 5.5%. 4. Royal Bank of Canada (USD) 3.84% 12/29/2036 (12/19/2016): 50MM Senior Unsecured Notes, Price at Issuance 100, Yielding 3.84%. 5. Toyota Motor Finance (Netherlands) BV (GBP) FLT% 1/17/2018 (12/19/2016): 150MM Senior Unsecured Notes, Price at Issuance 100. 6. Telefonica Emisiones SAU (EUR) 4% 12/28/2051 (12/20/2016): 150MM Senior Unsecured Notes, Price at Issuance 100, Yielding 4%.
  3. 3. ADI Indexes DATA CHECK: iShares Barclays Capital iShares Euro High Yield UCITS NAV as of 12/20/2016, 129.74 NAV as of 12/20/2016, 106.25 Daily NAV Change (%) +0.04% Daily NAV Change (%) - 0.23% OVERALL EUROPEAN CREDIT MARKET: The euro-zone economy shows some signs of improvement although beset by abnormally high unemployment in periphery nations, slow growth and a lack of consensus among leading officials as to how to resolve the region's long-standing debt crisis. Closely watched indicators and rates: Eurostat's unemployment rate: currently 10.0% (September 2016) Eurostat's quarterly GDP: 0.6%, Q1 (Final Estimate) 6-month Euribor: current value -0.216%, as of 12/20/2016 ECB main refinancing operations rate: 0.05% Copyright 2016 Advantage Data Inc. All Rights Reserved. http://www.advantagedata.com Information in this document should not be regarded as an offer to sell or solicitation of an offer to buy bonds or any financial instruments referred to herein. All information provided in this document is believed to be accurate. However, Advantage Data and its sources make no warranties, either express or implied, as to any matter whatsoever, including but not limited to warranties of merchantability or fitness for a particular purpose. Opinions in this document are subject to change without notice. Electronic redistribution, photocopying and any other electronic or mechanical reproduction is strictly prohibited without prior written permission from Advantage Data Inc.

×