HYBRIDS: EDP (EDPPL): Tender Results. Only accepting ~500m
(EDPPL; Hyb Baa3/BB+/BB+)
• EDPPL 5.943 Call28 - looks like it is safe from the threat of a Par Call
• Received €887.8m offers
• Accepting €498.8m with a 58.33% pro rata Scaling Factor
• EDPPL 1.5 First Call Dec 26 has €750m outstanding.
• Part of the proceeds from the recent EDPPL 4.375 NC33 will be used for the ultimate redemption of the 1.5% Dec 26 (As noted on the Tender announcement) whilst keeping the hybrid stack constant.
• We would expect EDPPL to revisit the market in the middle of 2026 with another tender on the EDPPL 5.943
• With €500mm set against the Dec 26 Call, the company would need to issue €750m to redeem the Dec 26 and take out the high coupon 5.943%.
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Historical bullets
CHF: USDCHF Strength Will Hinge on US Private Data This Week
- Broad USD strength combined with firmer global equities has helped USDCHF clear the October high, prompting the pair to change hands at its highest level since August 22nd. This clears resistance up to 0.8104. Sustainability of the move higher here will depend on the suite of private US data releases set for this week, specifically: today's US ISM Manufacturing and S&P Global Manufacturing PMI, ISM Services and ADP Employment data on Wednesday ahead of prelim UMich sentiment data on Friday.
- Following the surprising division of the FOMC at last week's rate decision, a presumed December rate cut has been called into question - and absent official US government releases, these private sector numbers will take on greater importance, and should certainly play a part in policy-setting for the hawks into the final decision of the year (indeed, Powell has referenced the Michigan inflation expectations survey in press conferences previously).
- As a result, a strong turnout from the private sector numbers this week would pose upside risks to USDCHF, and clearance of 0.8104 would extend the upside of the range toward 0.8171, the late July rally top.
US 10YR FUTURE TECHS: (Z5) Key Support Remains Exposed
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-06 20-day EMA
- PRICE: 112-25+ @ 10:48 GMT Nov 3
- SUP 1: 112-16 Low Oct 30
- SUP 2: 112-14 Low Oct 9
- SUP 3: 112-06 Low Sep 25 and a reversal trigger
- SUP 4: 111-30 Trendline support drawn from the May 22 low
Recent weakness in Treasuries undermines a bullish theme. The contract has traded through the 50-day EMA, at 112-26+, highlighting potential for a deeper retracement near-term. A continuation lower would open 112-06, the Sep 25 low and the next key support. On the upside, the contract needs to trade above 113-18+, the Oct 28 high to signal a possible bullish reversal. Key resistance and the bull trigger is at 114-02, the Oct 17 high.
EQUITY OPTIONS: Large Deutsche Bank Put Option
DBK (21st Nov) 30.5p, traded for 0.57 in 10k.
