CONSUMER STAPLES: Essity: updates
Apr-02 10:51
(ESSITY Baa1/BBB+/NR)
- Latest court documents (dated 6th Feb) was in reference to defendant (Essity) seeking to challenge the jurisdiction of English courts. The court extended the deadline to 21st Feb for it to submit that challenge.
- Latest public comments from company are in the annual report from early March which repeated it sees demands as unfounded.
- On levels, 29s & 30s went to trade at-to-wide of FV late last year (i.e. was a free option) but have since reversed ~35-40bps tighter (on reportedly thin flows).
Our thoughts from last year are unch; 1) EoD thresholds are met on face value but co is pointing to licensing agreements - details of which it refused to publicly disclose and 2) the EoD demand by investors is in bad faith; https://mni.marketnews.com/3YdT6Lk.
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CROSS ASSET: Euribor Strip is sold in Good size
Mar-03 10:50
- Short end Euribor seems to be leading Bonds lower here, the strip is sold through the lows in very good size.
- Bund is sold in 7k, BTP 3k, OAT 1.5k and Gilt on the follow in over 1.5k.
- We have not seen any new trigger as such, Equities are extending higher, and Bund is testing immediate support at 132.24.
- Further out would see the 131.84 Gap.
DUTCH T-BILL AUCTION RESULTS: DTC Results
Mar-03 10:34
| Type | 4-month DTC | 6-month DTC |
| Maturity | Jun 27, 2025 | Aug 28, 2025 |
| Amount | E1.23bln | E1.05bln |
| Target | E1.0-1.5bln | E1.0-2.0bln |
| Previous | E1.44bln | E1.47bln |
| Avg yield | 2.315% | 2.275% |
| Previous | 2.432% | 2.320% |
| Bid-to-cover | 1.45x | 1.62x |
| Previous | 2.24x | 1.3x |
| Previous date | Feb 03, 2025 | Feb 03, 2025 |
Source: Bloomberg
GILTS: Recovery Rally Fades Alongside Wider Risk-On
Mar-03 10:34
Gilt futures -67 at 92.76, which is a fresh session low.
- The bullish short-term technical set up in the contract remains intact.
- Initial support at 92.72, followed by 92.22.
- Yields 5-6bp higher across the curve.
- Cross-market cues continue to dominate.
- Second-round pressure stemming from wider risk-on flow results in fresh session lows for gilts in recent trade.
- A reminder that reports pointing to more forceful short-term German fiscal spending drove an early sell off.
- That was before a recovery as markets assessed increased U.S.-Ukraine tensions, which presents greater inflationary risk but widens the left tail of the economic growth outlook.
- Final UK manufacturing PMI was slightly higher than flash but still comfortably sub-50.
- GBP STIRs follow the long end.
- 52bp of BoE cuts priced through year-end vs. ~56.5bp late Friday.
- ~18bp priced through May, ~23.5bp through June and ~36.5bp through August, we still look for a cut in May at this stage.
- SONIA futures flat to -7.5.
- Final services PMI data (Wednesday) and the BoE DMP survey (Thursday) headline this week’s UK data calendar.
- This week’s BoE-speak will come from Bailey, Pill, Mann, Greene & Taylor.
- Expect more detail on those events in our Gilt Week Ahead publication.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.458 | +0.3 |
May-25 | 4.275 | -18.0 |
Jun-25 | 4.223 | -23.2 |
Aug-25 | 4.092 | -36.2 |
Sep-25 | 4.049 | -40.6 |
Nov-25 | 3.960 | -49.5 |
Dec-25 | 3.934 | -52.0 |
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