EU CAPITAL GOODS: CAPITAL GOODS: Atlas Copco (ATCOA A1/A+/A+): 3Q24 Results
Oct-23 11:48
Small miss, not credit moving.
- Atlas Copco reported revenues 4% below consensus at +1% organic (+2.5% expected). Book-to-bill is at 1x with 1% organic order growth. Currency effects were a headwind.
- Adj. EBITDA was also 4% below, margins in line.
- OCF was up 15% YoY, mainly due to WC release.
- It sees customer activity weakening going forward.
- Webcast 13.00 https://ir.financialhearings.com/atlas-copco-group-q3-report-2024.
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CANADA: Another Sizeable Wage Settlement
Sep-23 11:45
- The weekend saw CAMI members ratify a collective agreement between Unifor (Canada’s largest private sector union) and GM to avert a strike for 1,300 auto workers in Ontario, and with it the wage details behind it (press release here).
- “The new CAMI contract compresses three years of wage gains in the Detroit Three pattern into the two-year life of the agreement, providing 15% in negotiated wage Increases for production workers and 20.25% for Skilled Trades.”
- “Workers will receive an immediate 10% pay increase with a 2% increase in September 2025 and an additional 3% increase in July 2026.”
- Whilst not receiving quite the same publicity as the Air Canada and rail strikes before that, these large upfront wage increases continue to pose risks that services inflation could prove to be stickier than expected. We have written on the matter here and here.
EGB SYNDICATION: Spain 12-year linker mandate
Sep-23 11:18
"The Kingdom of Spain has mandated Citi, Credit Agricole CIB, Goldman Sachs Bank Europe SE, Morgan Stanley, Santander and Societe Generale for a new Obligacion del Estado syndicated linker Euro benchmark maturing on 30th November 2036 linked to Euro HICP ex tobacco. The transaction will be launched in the near future subject to market conditions. All remaining primary dealers in the Kingdom of Spain government bond market will be invited into the syndicate."
From market source.
- MNI expects a E3-5bln transaction to take place tomorrow.
- Note that we had expected a Spanish syndication this week in the MNI EGB Issuance, Redmeption and Cash Flow Matrix.
OUTLOOK: Price Signal Summary - Corrective Cycle In Bunds Still In Play
Sep-23 11:15
- In the FI space, Bund futures have pulled back from their recent highs. The move down has resulted in a break of the 20-day EMA. This signals scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.60. Clearance of this average would undermine a bullish theme. For bulls, a stronger reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high.
- A bull cycle in Gilt futures is still in play, however, the pullback from last Tuesday’s peak highlights a correction. The bearish extension is allowing an overbought condition to unwind. Support at 99.95, the 20-day EMA, has been breached. The clear break of this average signals scope for a deeper retracement and exposes 99.29, the Sep 9 low. A reversal higher would refocus sights on 101.54, Sep 17 high.
