EU HEALTHCARE: Astra Zeneca (AZN; A1/A+/Au Pos) Multi-Billion Licensing

"The United Kingdom Debt Management Office (DMO) announces that the new index-linked gilt, which will mature on 22 September 2038, will pay a coupon of 1 3/4% per annum, payable semi-annually. The new gilt will have the ISIN code GB00BMY62Z61 and the SEDOL code B-MY6-2Z6 and will pay a short first coupon on 22 September 2025."

• "The new gilt is planned for launch by syndication in the week commencing 9 June 2025, subject to demand and market conditions. Further details of this transaction will be announced in due course."

• -4,000 TYN5 110.5/110.75 strangle w/ 110.25/111 strangle, 1.63 net 110-19.5
• 3,000 TYN5 110.5 straddles, 115

The JOLTS report for April was on balance one of relative stability in another look at early reaction to Trump administration policies. Job openings surprisingly increased whilst the hire rate pushed to its highest since September although the quits rate pushed back lower again after what to us was a surprising uptick back in March. Of course, this is only for April in a fast-moving environment. 

• Job openings: 7391k (sa, cons 7100k) in April after a marginal upward revised 7200k (initial 7192k) in March.
• The ratio of vacancies to unemployed inched up from 1.02 to 1.03. The 1.02 was technically the lowest since Apr 2021. For context it has been in a relatively narrow range of 1.02-1.13 with an average 1.07 since Jun 2024) and averaged 1.2 in 2019 and 1.0 in 2017-18.
• The quits rate meanwhile dropped to 2.00% after what to us was a surprise increase back in March to 2.10%, for its lowest since Dec 2024.
• This rate is still above the 1.91 in November but remains significantly below the 2.3% in 2019 and 2.2% in 2017-18 in a sign of a cooling labor market.
• There’s a similar trend specifically for the private sector, at 2.22% after 2.33%, whilst government quit rates remain historically low at 0.8% overall and 0.5% specifically for federal employees.
• Hire rates showed some more encouraging signs, rising to 3.49% from 3.39% for their highest since Sep 2024, as it picks up from some low levels. It averaged 3.8% in 2017-18 and 3.9% in 2019.
• There’s a roughly similar story in private hire rates as well whilst the federal government hire rate held around 1% again, low by historical levels but continuing to stabilize rather than pushing lower.
• Layoffs meanwhile bounced to 1786k in April after the 1590k in March had been the lowest since Jun 2024. As is usually the case, gyrations are driven by the private sector. Government layoffs meanwhile fell back to 76k in April after two months at 100k, below the 83k averaged in 2024 for instance. The federal government only accounted for 3k of this. (Putting these gross layoffs into perspective, outright hire levels were 358k for the government and 31k for federal in April).
• Note that whilst Bloomberg now shows consensus expectations for quits and layoffs, the response sizes are much smaller than for openings, at 5 and 4 vs 32 respectively.