EU REAL ESTATE: Colonial (COLSM: Baa1/BBB+) Q1 25
Solid figures. Paris reporting strong uplift.
• Gross Rent €97.2m +4% like-for-like
• Paris has +20% release spreads on rents. (signed vs previous in re-let spaces), Madrid and Barcelona flat.
• Gross rent in Madrid +21% on new buildings offsets refurbishments in Paris
• Was upgraded Sep 2024 to Baa1.
• Pre-hedging allowed an effective rate on the recent 3.25% 2030 to be just 2.75%. The company has also pre-hedged to ensure <2.5% for the next 3 years.
• Group average cost of debt is low at 1.77% 100% hedged. Liquidity of €3bn covers 1.3x maturities for 3 years.
• LTV 36% is unchanged
• Net Debt €4.442bn January’s €500m issuance was applied to reducing credit lines.
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RIKSBANK: VIEW: Handelsbanken Now Expect Cuts In Jun, Aug and Sep To 1.50%
Handelsbanken now expect the Riksbank to cut rates to 1.50% this year, with cuts in June, August and September, as “the dramatic US tariff increases are leading to a US recession and delaying the recovery of the Swedish economy”.
- Their previous base case saw rates on hold a 2.25% through 2025.
- Handelsbanken note that “with higher tariffs than expected and turbulence in the financial markets, everything now indicates that [Swedish] growth this year will be significantly weaker than we expected in our previous forecast.”
- “Our assessment is that the inflation target is not threatened by the higher tariffs, and that the Riksbank will therefore act to mitigate the negative effects on the economy”.
US 10YR FUTURE TECHS: (M5) Monitoring Trendline Support
- RES 4: 114-10 High Apr 7 and the bull trigger
- RES 3: 113-09+ 76.4% retracement of the Apr 7 - 9 sell-off
- RES 2: 112-21+ 61.8% retracement of the Apr 7 - 9 sell-off
- RES 1: 112-08 High Apr 7
- PRICE: 110-25 @ 07:49 BST Apr 9
- SUP 1: 110-01 Intraday low
- SUP 2: 109-29 Trendline support drawn from the Jan 13 low
- SUP 3: 109-13+ Low Feb 24
- SUP 4: 108-26+ 76.4% of the Jan 13 - Apr 7 bull cycle
A sharp sell-off in Treasury futures this week has resulted in a breach of both the 20- and 50-day EMAs. Attention is on trendline support at 109-29, drawn from the Jan 13 low. A clear break of this support would strengthen a bearish threat. Note that the steep sell-off could still be a corrective pullback that has allowed an oversold trend condition to unwind. Initial resistance to watch is 112-08, yesterday’s high. A break would highlight a possible early reversal.
GILTS: Opening calls
Gilt calls, a wide range, 91.03/91.84.
- Note that Bund continues to recover after it fell 115 ticks on the cash Govie Open.
