Vanguard launches active managed global credit fund targeting UK Investors

http://www.retailbondexpert.com/Blog/Latest-News/2017/09/Vanguard-launches-active-bond-fund-targeting-UK-income-investors/

UK Retail - John lewis profit drops 53%

https://www.retailgazette.co.uk/blog/2017/09/john-lewis-partnership-profits-crash-53-3/

UK Pub stocks

Greene king warned last week. But prior to that Marstons had already plumbed to 52 week lows (stock). See atrached pic.

As usual, bonds appeared broadly unch as they are legaxy securitised bonds. UK funds like royallondon / invesco cant get enough of these sort of bonds. (Public info from HDS).

Names such as Punch and EIGLN have been involved in restructurings / m&a so its been dificult to tell if problems at greene king are representative of sector. ..

China to shutdown bitcoin exchanges -WSJ

https://www.wsj.com/amp/articles/china-to-shut-bitcoin-exchanges-sources-1505100862

7.8% drop in uk construction figs...readacross

Large 7.8% drop in qtr on qtr uk construction orders.

Not good sentiment for construction / engineering mid caps: Travis Perkins, Carillion and HSS.

See attached pic from pantheon economics

Test Blog Post

Testing..

Big gilt coupons being paid today

RBC: 17 conventional Gilts will pay coupons worth GBP 8bln today. GBP 3.7bln is owed to BoE; GBP 4.3bln will go back to the private sector
Src: ransquawk

Nationwide ccds - should be popular

I read that nationwide are doing a new ccds instrument. They are thr only issuer to issue this type of paper. Their inaugural issue traded up 27 points on the break if i recall correctly...

DM IG Credit - Buyer beware

August, a traditionally quiet time for global markets has seen pockets of single name volatility in what are large cap names.

Large-cap IG rated issuers that have seen their bonds widen materially are set out below:-

	Widening
Provident Financial	>1000bps
Carrefour	20bps
WPP	15bps
Prosieben	30bps

The common factor in all the names above (barring PFG) is a structural change in industries that may have gone largely unchecked by senior company management. I.e:

• With Carrefour the increasing prevalence of online ordering via Amazon or other food retailers, and its impact of bricks and mortar stores.
• With WPP / Prosieben and the likes of ITV, who are seeing declines in their advertising budgets from traditional media such as TV, as more people switch on to streaming platforms such as Netflix and Amazon Prime Video 

All of these names besides Provident are currently or have previously been included in Corporate Bond buying programs from the BoE or the ECB. As such their credit spreads, prior to their respective warnings had been artificially compressed by QE. 

This lesson highlights the importance of fundamental credit work prior to bond selection rather than just trying to ride the coat-tails of Central Bank buying. As the Central Banks begin to unwide, you could see a double effect on credit spreads, i.e when the natural supply of IG rated bonds available to investors increases and the impact of profit warnings on Issuers within those programs.

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