EU BASIC INDUSTRIES: Air Liquide: Guidance (AIFP; A2/A/NR)
Oct-29 12:13
• 4yr Guidance: Exp €500m ms+40a (+/-2) wpir
• Books: 2.6bn
• IPT: exp €500m 4yr ms+70-75 (100.50 call)
• FV: ms+30
• 7.5yr Guidance: Exp. €500m ms+65a (+/-2) wpir
• Books: 2.2bn
• IPT: exp €500m 7.5yr ms+95a (100.50 call)
• FV: ms+60 in line with AIFP 33s. We note that the AIFP 3.375 34 trades wide.
• 12yr Guidance: €BMK ms+85a (+/-2) wpir
• Books: 3.0bn
• IPT: € BMK 12yr ms+115-120 (101 call)
• FV: ms+75. Taking the recent AIFP 3.5% Mar 35 (Dec 34 Call) and adding 12bps for 3yrs in line with Linde curve.
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FOREX: 1.3490 Key Short-Term Level for GBPUSD, Contrasting Analyst Views
Sep-29 12:09
- Undermining the recent bullish theme, GBPUSD’s move lower last week resulted in a break of 1.3491, a trendline support drawn from the Aug 1 low. Price momentum quickly saw cable decline to the next target of 1.3333 before broader dollar weakness has prompted a solid bounce from the lows. Both 20- and 50-day EMAs now intersect close to the 1.3490 level, emphasising the short-term significance of this level.
- With such focus on the impending US employment report this week and the broader narrative of dollar weakness into year-end, short GBPUSD might not be the best instrument to express the weaker sterling view, something JP Morgan continue to highlight.
- With EUR/GBP making new highs last week, JPM’s higher conviction in GBP shorts has seen some validation, and they see more to come. JPM had been flagging the UK September PMI as being where political uncertainty could become a more noticeable drag on the data, consistent with the timings seen leading up to last year’s budget. Undershoots on services and manufacturing last week led to a two-point miss on the composite. JPM remain short GBP vs CHF, EUR, NOK, SEK.
- Conversely, Scotiabank believe fundamentals are supportive of medium-term currency strength as interest rate differentials are expected to reflect an outlook for relative central bank policy that anticipates less easing from the BoE—relative to the Fed. Scotia remain confident in the UK’s ability to deliver on its self-imposed fiscal rules and see scope for strength in the currency on the back of a shift in sentiment and positioning that remains negative and bearish.
STIR FUTURES: BLOCK: SOFR White Pack
Sep-29 12:06
- Total 8,000 SOFR White packs (SFRZ5-SFRU6) +0.015 from 0755:12ET-0800:00ET
- Likely a swap-tied sale with spreads running wider in the short end
STIR: Repo Reference Rates
Sep-29 12:03
- Secured Overnight Financing Rate (SOFR): 4.16% (-0.02), volume: $2.917T
- Broad General Collateral Rate (BGCR): 4.14% (-0.03), volume: $1.154T
- Tri-Party General Collateral Rate (TCR): 4.14% (-0.03), volume: $1.113T
- (rate, volume levels reflect prior session)
