EM CEEMEA CREDIT: First Abu Dhabi Bank (FABUH): FV $ 5Y
(FABUH; Aa3/AA-/AA-)
IPT @ T+95bp FV @ T+65bp
- We see FV for the proposed FABUH $ 5Y deal at around z+90bp or T+65bp. We derive our analysis looking at the seasoned FABUH secondary curve, with a focus on recent vintage deals.
- The Sustainable $ 5Y issued back in September FABUH 4.38 Sep30 is currently charting at z+75bp.
- The Sukuk format $ 5Y was issued back in January ‘25 FABUH 5.153 Jan30 is currently charting at z+82bp, in line with the shorter dated Sukuk deal FABUH 4.779 Jan29 also charting at z+82bp. In a similarly fashion to last year’s January issuance round, UAE’s First Abu Dhabi Bank (FABUH; Aa3/AA-/AA-) follows yesterday’s KFHKK $ 5Y Sukuk issuance with a $ 5Y deal live today, only this time it is in conventional format, not Sukuk.
- For context, back in October the 9M results provided a solid read, with 9M growth in line with low double-digit guidance, lending at +13% ytd. Asset quality was solid with CoR at 55bp in line with guidance <75bp and coverage at 106% (guidance >90%). Capital position was adequate with CET1 at 13.7% (guidance >13.5%). Total RWA sat at AED741bn, up AED101bn vs YE24. Link to our earlier note for more details: https://mni.marketnews.com/4hpeO7L
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EGB OPTIONS: Schatz Put Ladder strip
DUF6 107.10/107.00/106.90p ladder with DUG6 107.10/107.00/106.90p ladder strip, sold the 1 at 14 and 15 in 5k.
GILTS: Bear Steepening
Gilts take cues from EGBs in the wake of comments from the hawkish ECB Executive Board Member Schnabel, as she stressed her comfort with markets pricing rate hikes as the next move from the Bank.
- Firm wage indications in the latest REC report also factor into the move, even as the wider survey points to ongoing slack in the labour market.
- Futures sold off to 90.90, basing just above the December 2 low (90.87) before recovering to ~91.00 as of typing.
- Bullish short-term technicals remain intact. Fresh extension lower would target the November 25 low (90.53), while resistance comes in at the November 27 high (91.93).
- Yields 2.5-3.5bp higher, curve steeper.
- Benchmark yields are 7-9bp off last week’s lows after gilt bulls failed to force tests/breaks of November lows during last week’s rally.
- Comments are due from BoE's Taylor (17:30) & Lombardelli (18:30) although the topics of their addresses may limit the scope for comments on monetary policy (see prior bullet).
- Monthly economic activity data is due Friday.
SILVER TECHS: Trend Needle Points North
- RES 4: $60.852 - 1.382 proj of the Oct 28 - Nov 13 - 21 price swing
- RES 3: $60.000 - Psychological round number
- RES 2: $59.563 - 1.236 proj of the Oct 28 - Nov 13 - 21 price swing
- RES 1: $59.334 - High Dec 5
- PRICE: $58.415 @ 08:20 GMT Dec 8
- SUP 1: $54.003 - 20-day EMA
- SUP 2: $50.534/45.557 - 50-day EMA / Low Oct 28
- SUP 3: $41.135 - Low Sep 17
- SUP 4: $38.087 - Low Aug 27
Trend signals in Silver remain bullish - price traded to a fresh all-time high last week. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. The move above $55.00 signals scope for a climb towards $59.563 next, a Fibonacci projection. Sights are also on the $60.00 psychological handle. Initial support lies at $54.003, the 20-day EMA.
