EU REAL ESTATE: Akelius: 1H25 Results (AKFAST; NR/BBB-/NR)
Solid despite LTV increase.
• Rental Income E187m +5.3% lfl.
• NOI +8.1% lfl.
• Vacancy decreased from 6% to 3.7%; economic vacancy from 1.9% to 1.4%.
• Portfolio valuation +0.7% but in EUR terms fell from E5,992 to E5,621. Note the portfolio is mainly in North America.
• LTV consequently rose to 38%.
• Extended average financing duration from 2.7 to 3.1yrs with a EUR 107m secured loan.
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SOFR: Futures Hold Lower Even As Crude Sells Off, Fly Flow Eyed
SOFR futures hold lower even as benchmark crude oil futures move below Friday’s settlement levels (the latter trade ~$5 off Asia highs).
- Spillover from the bid in equity index futures offsets the pullback in crude oil, with recent cross-asset reaction pointing to a relaxation in market perception of risks surrounding an Iranian response to the U.S. bombing of its nuclear infrastructure.
- SOFR futures last little changed to -2.5.
- Implied terminal rate pricing on the SOFR strip sits at 3.26% vs. June dovish extremes of 3.165%.
- Flow headlined by an 11K lift of the SFRZ5/H6/M6 fly at -0.05, with a few hundred trading on the follow. That level is now well bid, with the offer at 0.0 thinning out.
- That fly has rallied from lows of -10.5 seen in late April/early May,
- Latest leg higher aided by last weeks flattener flow that lines up with the end of Fed Chair Powell’s firm (May ’26). With some suggesting the flow is speculation that his successor will be more sympathetic to President Trump’s preference for easier monetary policy.
- The fly hit a ’25 high at 0.5 last week.
EGB SYNDICATION: Mandate: Slovenia inaugural 10-year EUR sustainability-linked
- Slovenia has announced a mandate to hold an investor call today ahead of a transaction to launch an inaugural 10-year EUR sustainability-linked bond.
UK DATA: Flash PMI: Dovish undertones to report despite manufacturing beat
The UK PMI was in line with expectations for services at 51.3 but the manufacturing PMI was a little higher than expected at 47.7 (46.9 exp, 46.4 prior). However, the underlying conditions still had a dovish undertone for future monetary policy with both input prices and prices charged increasing at slower paces while private sector employment decreased at a faster pace than in May. More highlights from the press release below:
- "The latest increase in average prices charged by UK private sector firms was the slowest since January 2021."
- "Input prices across the UK private sector as a whole increased at the slowest pace for three months."
- "UK private sector employment decreased for the ninth consecutive month and at a faster pace than in May. Survey respondents suggested that excess capacity
and squeezed margins had encouraged cutbacks to workforce numbers through hiring freezes and redundancies." - "Manufacturers posted another export-led decline in order books. This was mainly attributed to the impact of US tariffs, rising geopolitical uncertainty and intense price competition in major global markets."
