EU Momentum Monitor - 26 February

26 February 2018

EU Momentum Monitor - 26 February | PDF

 
 

In macro news last week, the UK unemployment rate unexpectedly rose for the first time in two years to 4.4% in the three months to December from 4.3% previously. However, this was mostly due to more people joining the labour force, while the number of people in work actually rose. Nominal wage growth accelerated to 2.5% from 2.4%, although it remains below the rate of inflation of 3.0%. The 4Q17 GDP growth was revised down to 0.4% QoQ (1.4% YoY) from a previous estimate of 0.5% (1.5%). Elsewhere, the PMIs for both the euro area and Germany declined in February from their January highs, but the readings of 57.5 and 57.4, respectively, continue to point to robust growth ahead. German confidence indicators similarly weakened, with both the Ifo business climate index and the ZEW economic sentiment index retreating in February.

 

Tomorrow Germany will announce its preliminary February inflation rate, after the consumer price inflation was confirmed at a three-month low of 1.6% YoY in January 2018. Germany will announce its February unemployment rate after seasonally adjusted harmonised unemployment rate fell to 3.6% in December 2017 from 3.7% in the previous month. This is the lowest jobless rate since October 1980. Finally, the US will release its 4Q17 inflation rate second estimate after preliminary estimates showed the US economy expanded 2.6%, below the 3.2% in the previous period.

 

Norwegian Air Shuttle featured in this week’s top decliners list as its 7.25% 2019s traded down 4.96% WoW to 93.4. This follows as the Norwegian airline reported a weak set of 4Q17 results driven by an increase in fuel prices, a dip in load factor and weaker yields which impacted profitability. The  group reported a 30.2% YoY rise in 4Q17 operating revenues, however EBITDA swung to negative NOK 651.9m from positive NOK 673m in the same period  the year before (see latest Debtwire coverage here).

 

In contrast SAS featured two bonds in this week’s top gainers list, as the Sweden based airline saw its CHF denominated notes trade up 25.4% WoW to 39.5. It was reported last month that SAS is in discussions with aircraft manufacturer Airbus about buying A320neo jets (see latest Debtwire coverage here).