EU HEALTHCARE: IT SECTOR: Infineon: TSMC News A Positive But Discount To ASML Remains Wide
Jan-19 12:52
Infineon (IFX GY) credit is on the move after last night’s positive statement from TSMC (2330 TT).
- TSMC last night indicated its capex budget (seen as good forward indicator of chip demand) would be USD28-32bn, above consensus expectations – the equity was up around 7% over the Asian trading day.
- The lateral from the European peers has been more muted with ASML (ASML NA) and Infineon (IFX GY) only up c.1% but IFX’s ’25 bond (rated BBB) is sharply tighter in European trading, -10bp (IFXGR 0 5/8 02/17/25).
- ASML has opened quite a premium gap to IFX (see graphic) over 4Q23 (also BBB-rated); we acknowledge ASML is more geared to next-gen chips (sub-4nm) but the underlying economics do have some positive for IFX, we feel.
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US TSYS: Post-UK CPI Bid Extends
Dec-20 12:48
- Cash Tsys trade 4.5-7.5bps richer, as 2s joins longer tenors pushing to new best levels for the day as the US session more earnestly gets underway. There are no particularly new headlines but rather momentum from the bid seen in soft UK CPI spillover.
- The day’s strength is led by 2s for a bull steepening with 2s10s at -49bps (+1.5bp).
- TYH4 has touched a fresh session and week-to-date high of 112-25+, continuing a bullish trend to push closer to resistance at 112-28+ after which lies 113-12+ (Fibo projection points).
- Ahead sees existing home sales data after a heavy decline in October and the Conference Board consumer survey, before 20Y supply. Philly Fed's Harker could also see some headlines although impact is likely mitigated by moving to a non-voter before he retires in Jun’25 at the latest.
OUTLOOK: Price Signal Summary - Bund Bull Cycle Remains Intact
Dec-20 12:14
- In the FI space, Bund futures remain in an uptrend and the contract is trading higher today, confirming a resumption of the uptrend and an extension of the recent break of resistance at 135.81, the Dec 7 high. The move higher maintains the bullish price sequence of higher highs and higher lows. Sights are on 138.00 next. On the downside, key short-term support has been defined at 134.37, the Dec 8 low. A short-term pullback would be considered corrective.
- The current uptrend in Gilt futures remains intact and the contract has gapped higher today. This confirms once again, a resumption of the underlying uptrend and maintains a bullish price sequence of higher highs and higher lows. The focus is on the 103.12, the 2.618 projection of the Nov 24 - 29 - 30 price swing. Initial firm support lies at 100.20, the Dec 13 high and a gap low on the daily chart. Short-term weakness would be considered corrective.
EGB OPTIONS: Schatz put spread vs call
Dec-20 12:13
DUH4 106.40/106.00ps vs 106.60c, bought the ps for -9 (receive) in 20k.
