Here’s What to Watch in European High-Yield Bonds This Week
2020-02-17 11:27:39.929 GMT

By Marianna Aragao
(Bloomberg) — Bankers are expecting a quiet week for new
issuance in Europe’s high-yield market as the earnings season
rolls on and with U.S. financial markets shut on Monday.
Douglas GmbH and Eircom Group Ltd are among the companies
reporting fourth-quarter earnings this week. Investors will be
looking for updates from reporting firms on whether the
coronavirus is affecting current performance.
Several European high-yield issuers have sizeable exposure
to China but spreads have mostly remained unaffected, Spread
Research’s Benjamin Sabahi wrote in a note on Friday. Still, the
firm expects the virus to have a “significant impact” on the
first-quarter earnings of issuers including Adient Plc, Garrett
Motion Inc, Sappi Papier Holding GmbH and Stora Enso Oyj.
* Auto parts maker Faurecia reported sales in line with
estimates on Monday, and forecast a “solid reported sales growth
in 2020”
** Absence of any reference in statement to Chinese situation a
surprise, Oddo BHF analyst said
* Spreads measured by the Markit iTraxx Crossover Index
tightened to 211bps on Monday
* Other earnings this week include Douglas, Hapag-Lloyd,
Vallourec, Ardagh, Constellium, Eircom, Digi Communications
* Things to watch on the macro front:
** Tuesday: U.K. Unemployment Rate, German ZEW Survey
** Wednesday: U.K. CPI Inflation YoY, Minutes of the most recent
Fed meeting are published
** Thursday: U.K. Retail Sales, ECB Minutes
** Friday: Euro-Area Flash PMI Surveys, U.K. Flash Composite PMI
*** Read more: EMEA Week Ahead