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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CREDIT UPDATE
- €ICorp/€Fin/€HY tightened 1.9bp/1.9bp/7.4bp yesterday, outperforming iTraxx despite the continued high pace of supply. WoW moves now sit at +4.5bp/+5bp/+7bp with a large portion of the early-year sell-off now reversed (YTD moves are +6bp/+2bp.
- Lower-rated tiers continue to outperform with B-rated and CCC-rated bonds tightening 9bp/15bp DoD though performance is more dispersed YTD where it is BBB-rated bonds that are outperforming marginally (+5bp while AAA-rated and CCC-rated bonds are +9.4bp)•
- Within €IG, the short-end outperformed yesterday with 1-3yr credit -2.3bp bringing YTD widening to 3bp compared to YTD widening of 8-9bps in the belly of the credit curve (5-10yrs). The 2s10s OAS curve (constructed from BBG’s 1-3 yr and 10+yr credit indices) sits +2bp YTD at 18 bps.
- Consumer Cyclicals outperformed yesterday at -3.8bp, driven by a 5bp tightening in Automotive credit as auto issuers took a supply break, having been present in some form on each day that the primary market has been open so far (€7.15bn of €IG supply YTD with an average 27.6bp of tightening from IPT, a total cover of 2.9x and an average BBG NIC of 17.7bp along with €1.1bn of HY supply from Schaeffler AG).
- On a YTD basis, only BBG’s REITs and TelCo sub-indices are in the green (both ~2bp tighter) while transportation bonds have underperformed (+10bp). This sub-index is heavily tilted towards Transport Services though we do note East Japan Railway bonds still weighing on the index somewhat in the wake of the Japanese earthquake.
- Fedex, however, is the real underperformer within the index, with three of the worst five performing constituents and each of these three bonds sitting with an OAS over 20bp wider YTD. We note FedEx equity only -0.3% YTD and the only significant news we see is a Postal Service contract loss (TD equity analysts expect FedEx to walk away from the postal business when the contract expires) though this came after much of the OAS move.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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