EU BASIC INDUSTRIES: ArcelorMittal: Moody's Upgrade
Not a likely spread mover for us. With spreads close to AALLN and GLENLN, we see more value in the latter currently. GLENLN ESG metrics have been hampered by its decision to retain coal assets; we are not experts there but plans to increase exposure to copper may help.
- Moody’s is once again aligned with S&P. It had been on positive outlook since February 2024.
- Metrics were already firm, but leverage is off the lows and higher than when it was put on outlook positive.
- Like S&P, Moody’s is focused on the strengthened business profile, which has helped margins.
- It expects its measure of gross leverage to improve from 3.9x to the 3x threshold, helped by revenue from recently added capacity.
- Ad. FCF is set to turn positive in 2026 and ramp up to $1bn in 2027.
- RCF/ND is expected to reach 35% against a 25% rating threshold.
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EU: Commission Outlines Varied Accession Progress For Candidate Countries
The European Commission adopted the 2025 Enlargement Package, the report assessing the progress accession countries have made over the past year towards meeting the criteria required to join the EU. Assessments range from the positive (Montenegro and Albania are seen as being on course to close accession negotiations by end-2026 and end-2027 respectively), to the balanced (Ukraine, Moldova and Bosnia and Herzegovina are judged to have made progress but need to accelerate the pace of reforms), to the negative (Turkey and Georgia, both criticised for the erosion of democratic values, with Georgia in particular labeled a 'candidate country in name only').
- Montenegrin Deputy PM Filip Ivanović has said that if the negotiations can be concluded by end-2026, then Montenegro would seek to become the EU's 28th member state in 2028.
- European Commission High Representative for Foreign Affairs and Security Policy Kaja Kallas said, "Russia’s full-scale invasion [of] Ukraine and the geopolitical shifts make the case for enlargement very clear cut, [but the EU] won’t cut corners and [does not] offer any shortcuts.” Enlargement Commissioner Marta Kos said of Ukraine's accession plans, “It will be essential to sustain this momentum and prevent any risk of backsliding, in particular on anti-corruption.”
- Ukrainian President Volodymyr Zelenskyy and Moldovan President Maia Sandu have both called for the EU to open all 'negotiating clusters' with their countries. However, given the issues surrounding anti-corruption efforts and security concerns in the face of Russian invasion/hybrid attacks, in the medium term, Montenegro and Albania are the only countries looking likely to join the EU by 2030.
USDCAD TECHS: Clears The Bull Trigger
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.4111 High Apr 10
- RES 1: 1.4096 Intraday high
- PRICE: 1.4088 @ 15:04 GMT Nov 4
- SUP 1: 1.3987 20-day EMA
- SUP 2: 1.3928 50-day EMA
- SUP 3: 1.3888 Low Oct 29 and a key support
- SUP 4: 1.3855 Bull channel base drawn from the Jul 23 low
A strong rally in USDCAD last week, and this week’s extension, highlights a clear reversal of the corrective bear leg between Oct 14 - 29. The pair has breached 1.4080, the Oct 16 high to confirm a resumption of the uptrend. Note too that moving average studies are in a bull-mode position, highlighting a dominant bull cycle. Sights are on 1.4111 next, the Apr 10 high. First support lies at 1.3987, the 20-day EMA.
AUDUSD TECHS: Pullback Extends
- RES 4: 0.6707 High Sep 17 and a bull trigger
- RES 3: 0.6664 2.0% 10-dma Envelope
- RES 2: 0.6644 76.4% retracement of the Sep-Oct bear leg
- RES 1: 0.6562/0.6618 High Nov 3 / High Oct 29
- PRICE: 0.6494 @ 15:01 GMT Nov 4
- SUP 1: 0.6481 Intraday low
- SUP 2: 0.6440 Low Oct 14 and key support
- SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
A softer short-term tone in AUDUSD remains intact for now and today’s move lower reinforces this theme. The pair has also traded through the 50-day EMA - a bearish development - and the move down undermines a recent bullish theme. A continuation lower would signal scope for an extension towards the first key support at 0.6440, the Oct 14 low. Key resistance and a short-term bull trigger is at 0.6618, the Oct 29 high.
