EU CAPITAL GOODS: Honeywell (HON A2/A/A): 4Q24 Results
Feb-06 11:34
One notch downgrade appears to be priced in already. Bondholders will be hoping that the final outcome is no worse than that; it should be achievable absent any unequal burden sharing.
- Separation into Automation, Aerospace and Advanced Materials. AM will be spun off by early 2026, with separation of the former two to be completed in 2H26. Separation costs will be $1.5-2.5bn.
- Quantinuum to be prepared for eventual IPO.
- It says balance sheets will be “appropriate” for each business, with both Aerospace and AM to maintain strong IG ratings.
- 4Q revenue was 3% better than consensus.
- EBIT missed by 13%.
- FCF of $1.9bn was just ahead of $1.8bn expected.
- FY25 revenue guidance was 3% below consensus at midpoint. FCF guidance was 10% below.
- Webcast 13.30 GMT https://event.choruscall.com/mediaframe/webcast.html?webcastid=ONMoNod8.
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BONDS: Core global FI Remains Under Pressure, Gilts Lead Sell Off
Jan-07 11:34
Swelling € & $ IG supply continues to weigh on bonds, alongside an uptick in crude oil futures.
- Elsewhere, a bid in European equities may be applying further pressure.
- Global core FI curves bear/twist steepen on the day.
- Gilts continue to lead the sell off, with 30-Year yields trading to fresh multi-decade highs and 10s threatening a clean break of their December high (technicals for 10s and 30s detailed in earlier posts).
- Gilts also falling afoul of fiscal/issuance risks, adding to broader global FI pressure, with the move higher in yields continuing to erode already narrow fiscal headroom in the UK.
- Solid reception of the latest 30-Year gilt auction did little to counter the sell off.
- Bears fail to retest yesterday’s lows in TY & Bund futures as of yet.
EQUITIES: EU Bank Risk Reversal
Jan-07 11:33
SX7E (17th Jan) 143/151RR, bought the call for 0.25 in 10k.
ESM ISSUANCE: 3-Month ESM-Bill
Jan-07 11:33
| Type | 3-month bills |
| Maturity | Apr 3, 2025 |
| Amount | E1.095bln |
| Target | E1.1bln |
| Previous | E1.09bln |
| Avg yield | 2.649% |
| Previous | 2.817% |
| Bid-to-cover | 3.65x |
| Previous | 4.07x |
| Previous date | Dec 03, 2024 |
