Danske Research Team
Danske Bank A/S
What's on our minds
- General credit market news
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New issuances were high on the agenda last week as many issuers took advantage of the benign markets. In the Nordic space we saw issuances from, among others, Hoist Kredit with its inaugural EMTN transaction of a three-year EUR250m senior unsecured at ASW+322bp, and HeidelbergCement with an eightyear EUR750msenior unsecured at ASW+205bp.
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Of the expected upcoming issuances, Nykredit's announcement of an EUR500m ‘Senior Resolution Note' will be of special interest to us, as it is one of the very first issuances of contractual subordinated senior bonds in the European market – one that is expected to grow to several hundred billion euros in coming years as a result of the upcoming Total Loss-Absorbing Capacity (TLAC) requirement due in 2019. For Nykredit, the driver is not the TLAC, as this is only for the world's largest banks, but the S&P's ALAC requirement, which is similar to TLAC in many ways.
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In the secondary market activity was more subdued, as new issuances took much investor focus but with a generally positive tone; iTraxx Main narrowed 8bp and iTraxx Crossover 28bp.
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The coming period is expected to become more volatile with the UK referendum approaching along with the normal summer slowdown. Added to this is the increased probability of a Fed hike even in June or July as a result of the speech given by Janet Yellen on Friday last week. We continue to forecast the next Fed hike for September.
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Editors’ Picks
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Gold retreated from record highs, maintains the upward bias
Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.
GBP/USD holds steady near 1.2700, in an uneventful US session
GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground while central bank officials fail to trigger some action ahead of this week's key events.
Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing
XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.
Week ahead: Nvidia results and UK CPI falling back to target
What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower.