EU HEALTHCARE: Baxter: 2Q Results (BAX; Baa2/BBB neg/NR)
Jul-31 11:29
A slight miss. Small cut in guidance.
• Sales $2.81bn +4% reported. -0.5% vs expectations.
• Gross margin 35.3% down 3ppts. Net Margin 6.8% up 20bps.
• EPS $0.59 shy of the $0.61 expectation.
• Medical Products $1.32bn +1% operational
• Healthcare Systems $767m +2%
• Pharma $612m +1%
• Outlook: Sales growth reduced to +3 to +4% operational (from +4 to +5%). Notes potential downside risks from Med Products
• EPS outlook cut to $2.42 to $2.52 from $2.45-$2.55.
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OUTLOOK: Price Signal Summary - Reversal In USDJPY Extends
Jul-01 11:26
- In FX, the trend set-up in EURUSD remains bullish and the pair continues to appreciate. Last week’s gains resulted in a breach of resistance and a bull trigger at 1.1631, the Jun 12 high. This confirms a resumption of the trend. The 1.1800 handle has been pierced, sights are on 1.1851, the Sep 10 2021 high. Key short-term support to watch lies at 1.1554, the 20-day EMA. A clear break of this average is required to signal scope for a deeper retracement.
- GBPUSD is trading at its recent highs. The trend needle continues to point north and last week’s climb reinforces bullish conditions. Fresh cycle peaks maintain the price sequence of higher highs and higher lows. Note too that MA studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 1.3800 next. Initial support to watch lies at 1.3569, the 20-day EMA. A break would signal scope for a corrective pullback.
- A bear threat in USDJPY is present and recent weakness reinforces this theme. The Jun 23 shooting star candle formation highlights a reversal of the recent recovery and price has traded through the 20- and 50-day EMAs. The clear break of the averages strengthens a bearish threat and opens 142.12, the May 27 low and a key short-term support. On the upside, a move above 148.03, the Jun 23 high, would reinstate a bullish theme. Initial resistance is at 145.04, the 50-day EMA.
EQUITIES: EU Bank Rolling Option Put
Jul-01 11:16
SX7E (19th Dec vs 19/06/26) 160p, sold the 2026 at 3.5 in 4k.
FOREX: Swiss Franc Outperforms, EURCHF Re-Approaching 0.9300
Jul-01 11:01
- With more of a focus on rate differentials returning to currency markets, the main beneficiaries of Tuesday’s extension of dollar weakness have been the low yielding JPY and CHF. While USDCHF continues to broadly mirror the performance of the dollar index, spot references below 0.7900 are notable, as the pair continues to trade at the lowest level since the removal of the EURCHF floor in 2015. The next technical target is 0.7827 - 1.618 projection of the May 1 - Sep 6 '24 - Jan 13 price swing.
- Dollar aside, levels for Cross/CHF are also worth flagging given the likes of CHFJPY traded to a fresh record high of 181.84 on Monday, and posted a 3.64% advance in June. Additionally, while EURCHF continues to broadly respect its well-established 0.9300-0.9430 range across the last two months, today’s 0.38% decline sees spot re-approaching the lower bound. A close below the 0.93 handle would certainly renew the focus on the key double bottom support, located around 0.9210. In similar vein, GBPCHF has traded to a two-month low this morning at 1.0850.
- Analysts have been citing the continued tailwind for the Franc from the strengthened relationship to the Euro and the notable outperformance despite an easing in geopolitical tensions. Some have cited there remain multiple paths to further CHF appreciation near-term, even against a potential backdrop of negative rates.
