EU CONSUMER STAPLES: Barry Callebaut; FY Updates, Cocoa Prices
Oct-08 13:31
(BARY; Baa3 Neg/BBB- Neg/NR)
Re. earnings ahead (FY25) we revise FCF expectations from CHF -1.95b to -1.2b and leverage from net 7.2x to 6.4x (or on adj. earnings 5.1x). ICR assumption unch at 1.5x. It will report on 5 Nov, revisions are on the more favourable Cocoa prices that held between Mar-Aug.
Cocoa prices are continuing to move favourably, now -16% y/y heading into the Main crop. Back of hand mgmt estimate was every £100 move in Cocoa impacts NWC by CHF70-80m -> move thus far implies WC release/inflow of +£700-800m for the next FY.
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UK: Labour Deputy Party Leader Contest to Step Up This Week
Sep-08 13:27
- The Labour deputy party leader contest (which is a separate appointment to the Deputy Prime Minister) is expected to begin this week.
- The BBC reported that it expects hustings from MPs on Wednesday before nominations close at 17:00BST on Thursday. Unless Labour’s NEC (National Executive Committee) changes the rules around the appointment, candidates will need at least 20% of the parliamentary party’s support as well as either at least three affiliate groups (at least two of which must be unions) or 5% of local parties.
- Emily Thornberry has already announced that she will run but more concerning for markets will be if Louise Haigh was to be selected for the position.
- Haigh is more left leaning and resigned from the Cabinet last year after pleading guilty to fraud (with respect to an issue from a decade ago). She is yet to formally declare her interest in the position but she wrote an opinion piece in the New Statemen (see here) in which she noted that the OBR “locks in decline” noting that “its models often underestimate the long-term returns of public investment and ignore the wider benefits of progressive taxation or public ownership.” She also argues that she supports “a review of QT’s pace and method, and a shift toward tiered reserve interest to match what other central banks already do, could save billions and ease pressure on spending.”
- The position of deputy party leader is more symbolic than anything, but with it would come influence and the ability to further ignite some of the left leaning backbenchers to put pressure on some of the fiscal reforms that more progressive members of the party (and markets) deem necessary.
SOFR OPTIONS: BLOCK: Nov'25 Call Spread Sale vs. Dec'25 Call Fly
Sep-08 13:27
- 7,000 SFRX5 96.37/96.50 call spds (4.25) vs. 5,000 SFRZ5 96.56/96.68/96.81 call flys (0.75) at 0909:20ET
FED FUNDS FUTURES: BLOCK: Large Nov'25 FF Buy
Sep-08 13:21
- +24,000 FFX5 96.145, post time offer at 0908:30ET, DV01 appr $1M
- The Nov contract trades 96.15 last (+0.010)
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