European corporate bonds moved higher in value again on Friday despite disappointing macroeconomic data from the United States, as the market looked ahead to new corporate issuance next week.
In investment-grade territory, spreads moved around a basis point tighter in industrials in slow trade even as the University of Michigan's consumer confidence number slipped to 95.8 in September, below analysts' expectations of a rise to 96.5.
"I don't think anyone cares about any of these macro figures. The market is just being squeezed tighter, and it's not about individual names any more," a dealer in London said. "Whoever's long at these levels is having a field day."
Autos gained, with General Motors Corp.'s 8.375 percent euro bond due 2033, one of Europe's most widely traded bonds, tightening some four basis points to be bid at 265 basis points over Bunds, he said.
Euro-denominated bonds of Ford Motor Co. were little changed despite the company raising its earnings outlook due to strength from its financial services sector, another trader said. Ford also announced the end of car production at a Jaguar plant in Britain and its withdrawal from Formula One racing.
Ford's 5.75 percent 2009 euro bond was unchanged at 120 basis points over Bunds.
The pick-up in primary market activity, with a number of names on the docket for next week, is welcome, the trader said, with the flow of new paper set to mop up some of the demand for credit, and debut issuers set to offer diversity.
German utility EWE and coffee roaster and retailer Tchibo Holding announced plans this week to launch debut euro-denominated bonds, with roadshows under way next week.
Next week should bring a sterling deal from retail giant Wal-mart, expected to carry a 30-year maturity, along with euro-denominated debut issues from US grain and crude oil trader Cargill Inc. and French auto finance company Socram.
Monday may also bring a fillip in credit derivatives trading as the second series of the DJ iTraxx Europe credit default swap indices are launched.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 44.7 basis points more than similarly dated government bonds at 1437 GMT, unchanged on the day.
In the high-yield market, Big Food Group bonds edged higher after the owner of Britain's Iceland frozen food chain said it had held talks about a potential takeover worth about 378 million pounds.
Big Food's 9.75 percent sterling-denominated bond was at 101.5 percent of face value, between one and two points higher on the day, traders said.
Adding to the primary market pipeline, Spanish gaming group Cirsa Business Corporation SA is planning to add around 60 million euros to its outstanding 210 million euro high-yield bond due 2014, Chief Financial Officer David Royo said on Friday.
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