EU HEALTHCARE: Abbott Labs (ABT): S&P Neg Watch; Moody's Affirm
(ABT; Aa3/AA-*-/NR)
Mixed Responses from the Agencies
• S&P places on Watch Negative.
• Sees leverage going above 1.5x threshold. Will resolve rating in 2Q26 when the Exact Sciences transaction closes.
• Moody's affirms Aa3, Outlook remains Stable.
• Moody's does see Gross Leverage rising from 1.3x to ~3.0x but anticipates strong earnings growth will see a cut to 2.5x by YE26.
• Moody's thresholds >2.5x Downgrade; <1.75x Upgrade
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GILTS: Opening Calls
- Gilt Calls would have been 93.01/93.05 without the lower UK Data.
- Given that the Sonia Strip is 12.5 ticks up, some are looking for Opens towards 93.50.
- Note that the 4.40% Yield was around the 93.61 at the start of the Week.
EGBS: Bunds See Spillover Support from Gilts, But No Price Breakout Yet
- Bunds jumped 10 ticks at the cash open following the lower than expected UK CPI print but the contract is still closer to flat in early trade. German 10yr yields remain under pressure with the next downside target seen at 2.50% (equated to the 130.76 price level yesterday).
- Support moves up to 129.76, which matched the 2.60% level on Monday. An unwind lower in futures will open a move to 129.55 and more importantly 129.13, marking resistance-now-support.
DATA: There are no tier 1 data releases left for the session so focus will turn to the German and US supply today.
SUPPLY: Germany €3bn 2032 (equates to 35.1k Bobl or 19.1k Bund) could weigh if it is hedged against the 5yr. US are to sell $13bn in a reopening of the 20yr.
SPEAKERS: ECB's de Guindos and President Lagarde.
EQUITIES: EU Cash Opening Calls - Focus on the FTSE
EU Cash Opening Calls, immediate focus is on the FTSE following the lower UK inflation and Barclays better Earnings:
- Calls: Estox 50: -0.08%, Dax: +0.18%, CAC: -0.33%, FTSE +0.65%, SMI +0.04%.
