EU CREDIT SUPPLY: Aroundtown (ARNDTN): GBP 7yr Spread +155
Dec-04 12:19
(ARNDTN; NR/BBB/NR)
• Guidance: £ BMK 7yr Spread set G+155
• Books >£950m
• IPT: £ BMK 7yr UKT 4.25% 32 +170-175 (z+208-213)
• We see FV G+140 ~z+177
• In EUR, ARNDTN is +50 vs URWFP; +60 vs PRIFII; +65 vs SGROLN
• Existing ARNDTN 31s G+121 z+163 for 5.5yrs. This is a partially tendered, old bond from 2019.
• Joint Bookrunners: BNP, Goldman (B&D), JPM, Morgan Stanley
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OUTLOOK: Price Signal Summary - Support In Bunds Remains Exposed
Nov-04 12:19
- In the FI space, Bund futures traded to a fresh short-term cycle low yesterday. A bear cycle remains intact for now. The move down that started on Oct 17 still appears corrective and has allowed an overbought trend condition to unwind. However, price has pierced a key support at 129.13, the 50-day EMA. A clear break of this EMA signals scope for a deeper retracement and open 128.92, 61.8% of the Sep 25 - Oct 17 bull leg. First important resistance is 129.73, Oct 28 high.
- The trend structure in Gilt futures remains bullish. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. The next upside objective is 94.00. Clearance of this level would open 94.24, a 1.618 projection of the Sep 3 - 11 - 26 price swing. Note that the contract is overbought, a short-term pullback would allow this trend condition to unwind. Initial firm support to watch 92.81, the 20-day EMA.
FOREX: USDCAD Rises to Highest Level Since April, Above 1.4080
Nov-04 12:15
- USDCAD (+0.18%) is rising for the fourth consecutive session, propelling the pair to its highest level since April 10, above 1.4080. Recent price action has been highlighting a reversal of the corrective bear leg between Oct 14 - 29. A recent doji candle on Oct 29 signalled a short-term reversal, providing an additional bullish impulse to the underlying uptrend.
- Today’s breach of the bull trigger places the next focus on 1.4111, the April 10 high and 1.4167, the 50.0% retracement of the Feb 3 - Jun 16 bear leg.
- The noted risk pessimism will be weighing on the Canadian dollar today, however, today’s Federal Budget remains an additional key risk; Citi see a "significantly more expansionary than previous" annual budget - and they see markets putting particular importance on the estimated budget deficit for the 2025 and 2026 fiscal years.
- They see these estimates being even wider than suggested during the election campaign, with some forecasts as high as C$100bln (reflecting weaker growth and reduced tax revenues, not solely increased spending). They conclude that the composition of new spending will be important for growth and any BoC reaction.
- Separately, Canada will release jobs data for October on Friday, with analysts citing the focus on the unemployment rate, where further increases from the current 7.1% could fuel dovish bets.
PIPELINE: Corporate Bond Roundup: Supra Sovereigns on Tap Tuesday
Nov-04 11:54
- Date $MM Issuer (Priced *, Launch #)
- 11/04 $800M Breakwater Energy 5NC2 9%a
- 11/04 $500M #Sharjah Islamic Bank5Y Sukuk +95a
- 11/04 $Benchmark Hashemite Kingdom of Jordan 7Y 6.375%a
- 11/04 $Benchmark Lao People's Democratic Rep 5Y 11.25%a
- 11/04 $Benchmark Standard Chartered Perp NC10 7.375%
- 11/04 $Benchmark QBE Insurance 12NC7 +170a
- $40.7B Priced Monday, driven by Alphabet's $17.5B over 8 tranches and Novartis $6B over 7 tranches:
- 11/03 $17.5B *Alphabet: $1B 3Y +30, $500M 3Y SOFR+52, $2.5B +5Y +40, $1.25B 7Y +50, $3.5B 10Y +62, $2B 20Y +72, $4B 30Y +82, $2.75B 50Y +107 (massive debt issuance includes $6.5B over 6 tranches: 3Y, 6Y, 7Y, 13Y, 19Y and 39Y).
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