US TECHNOLOGY: Fiserv: Secondaries RV
We see room for compression for FI 5 '35. We think FI should trade ~flat to EQIX and DELL, ~5bps inside MRVL and ~10-15bps back of UBER. We think FI should also trade modestly inside business comp FIS and well inside GPN, although view FIS and GPN levels as currently off due to pending M&A deals.
• FI has been under pressure due to a few factors in our view: 1) Modestly underwhelming Clover growth on weaker volumes 2) Increased share repurchases which have been > FCF 3) Series of tuck-in M&A announced 4) Payments space broadly under pressure due to disintermediation risks heightened by stablecoins regulatory clarity.
• FI 5 '35 priced on 08/04/2025 at +107 and currently trades at g+96. We see room for further compression. Catalysts include an acceleration of Clover volume growth (to achieve $3.5B Clover revenue for FY25) - reports on 10/22/2025.
• We expect that FI will continue to favor returns to shareholders and tuck-ins, and that it will manage its leverage within its target of <3x, limiting meaningful spread compression or rating upgrades.
• We view disintermediation risks as overdone and are encouraged by FI's proactive measures to entrench itself in the payments industry evolution.
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US 10YR FUTURE TECHS: (U5) Fading Toward Support
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5
- PRICE: 111-16 @ 16:48 BST Aug 18
- SUP 1: 111-10+ 50-day EMA
- SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
- SUP 3: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 4: 109-28 Low Jun 6 and 11
The underlying bullish theme in Treasury futures remains intact, supported by the recent clearance of the bull trigger at 112-12+, the Jul 1 high. A resumption of gains would open 112-23, the May 1 high and the next important resistance. Above 112-23, retracement levels are layered between 113-07 and 113-23. On the downside, key support is 110-08+, the low on Jul 15 and 16. Prices faded into the Monday close, however first support is yet to be tested at 110-23+, the Aug 1 low.
EUROPEAN COUNCIL: Costa Calls Leaders Meeting 19 Aug To Assess White House Talks
European Council President Antonio Costa has confirmed an extraordinary video conference of European Union member state leaders to take place tomorrow (19 August) at around 13:00CET (07:00ET, 12:00BST). The topic of the video call will be to discuss the White House meetings taking place later today between US President Donald Trump, Ukraine's Volodymyr Zelenskyy, and a number of European leaders. Costa posted on X, "Together with the US, the EU will continue working towards a lasting peace that safeguards Ukraine’s and Europe’s vital security interests”.
- Earlier today, Politico reported that a Coreper II meeting of permanent representatives (i.e. member state ambassadors to the EU) would be called over the coming days to assess the 18 August talks. However, it would seem that the importance of the White House meetings has necessitated an upgrade to the national leader level.
- While all EU leaders attending the White House talks (Germany's Friedrich Merz, France's Emmanuel Macron, Italy's Giorgia Meloni, Finland's Alexander Stubb, and Commission President Ursula von der Leyen) are strongly pro-Kyiv, bringing in all EU leaders will likely see more discord.
- This is particularly the case with regard to Slovakia and Hungary. A Ukrainian attack on Russian O&G infrastructure is alleged to have halted Russian crude oil shipments to Hungary and Slovakia on 18 Aug, resulting in a furious tirade from Hungarian Foreign Minister Peter Szijjarto who called the attack "outrageous and unacceptable", and threatened Ukrainian electricity supplies. The EU's efforts to push for a 19th round of sanctions on Russia may be stymied by such discord.
FOREX: EURCHF Pierces Key Resistance, Continues to Consolidate Above 0.9400
- Despite an intra-day reversal lower owing to weaker risk sentiment, early price action on Monday saw EURCHF briefly rise above 0.9447, the April highs and a key resistance point for the pair. Spot continues to consolidate above the 0.9400 level which had contained the price action in July, keeping short-term trend indicators pointing to the upside. Also, as opposed to the EUR, CFTC data shows CHF non-commercial positioning in short territory as of August 12.
- Additionally, markets assign an unusually low premium to hedging against CHF strength, with the 25 delta 1m risk reversal in EURCHF currently reaching a significant chart level just below neutral. The last non-marginal positive print in the measure was seen in February 2022, right before the Russia - Ukraine conflict started. The fact that a ceasefire agreement with favourable conditions for Ukraine would likely see this move above zero again underscores that financial markets do view the conflict as decisive for the fate of the bloc.
- Indeed, MUFG write today that "a further reduction in geopolitical risk should a ceasefire be agreed would favour lower volatility alongside recent decisions from major central banks to leave rates on hold [which would be] at the expense of the safe haven currencies of the Swiss franc and yen"
- A sustained break of 0.9447 would bolster the likelihood of a stronger recovery for EURCHF, initially targeting pivotal resistance at the 0.9500 handle. In terms of support, the 20-day EMA coincides closely with the July 28 high around 0.9385.
