EM CEEMEA CREDIT: Ivanhoe Mines: Q3 Earnings, Neutral
(IVN; NR/B/B)
- Our read of the latest quarterly results is neutral for credit sentiment. In secondary markets, IVN Jan30 chart around z+330bp or 6.70% yield area, that is some 75bp tighter vs levels seen at the time of Q2 results’ announcement. The bond launched back in Jan ’25 at 7.875% yield.
- DRC-focused, Canada-HQ multi miner Ivanhoe Mines ((IVN; NR/B/B) remains operationally constrained by the on-going remedial works following the impact of seismic activity at its Kakula mine earlier in May. Although prod’n was impacted during the third quarter, the dewatering process at Kakula Mine is expected to complete stage two in early December. The Co. expects to see prod’n of higher grades commencing as early as 4Q25. An updated life-of-mine plan is also under evaluation and in progress, whilst an update on medium term prod’n guidance is expected in 1Q26.
- Financially, rev’s in Q3 sat at USD555mn, as impacted by lower volume prod’n. EBITDA reached USD195mn with EBITDA margin at 35% sequentially in line, but still well below long term avg. On the cost front, Copper C1 has significantly increased during the quarter on lower prod’n and sits at an elevated $2.62/lb. This leaves Q3 net profit at a meagre USD31mn.
- Liquidity remains ample, with raised cash & equiv. reaching USD1.1bn. Net debt is reported sequentially lower at USD839mn. A private placement of USD500mn with Qatar Investment Authority (QIA) has contributed to strengthening the balance sheet in Q3. The reported pro-rata net leverage has decreased sequentially to 1.47x (was 1.83x at end of Q2).
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GBPUSD TECHS: Approaching Pivot Resistance
- RES 4: 1.3789 High Jul 1 and key resistance
- RES 3: 1.3726 High Sep 17
- RES 2: 1.3661 High Sep 18
- RES 1: 1.3537 High Sep 23 and a pivot level
- PRICE: 1.3525 @ 14:36 BST Oct 1
- SUP 1: 1.3324 Low Sep 25 and the bear trigger
- SUP 2: 1.3282 Low Aug 6
- SUP 3: 1.3254 Low Aug 4
- SUP 4: 1.3144 38.2% retracement of the Jan 13 - Jul 1 bull cycle
The bear cycle in GBPUSD that started Sep 17, remains in play and the latest bounce - for now - appears corrective. Initial key resistance to watch is 1.3537, the Sep 23 high and a pivot level. A break of this hurdle would signal a potential reversal. Recent weakness resulted in a break of a trendline drawn from the Aug 1 low. Note too that 1.3333, the Sep 3 low and a key support, has been pierced, opening 1.3282 next, the Aug 6 low.
US DATA: Construction Spending The First Test Of Shutdown Data (Non-) Releases
The first test of the federal government shutdown's impact on data releases will come at 1000ET when the Census Bureau is due to release the monthly Construction Spending report for August. While there is some uncertainty, it's unlikely to be published.
- The only "confirmation" since the shutdown started last night that we have had of whether data will be published has come from the Energy Information Administration (EIA) which posted a notice this morning that it "will be able to operate for a period of time during the lapse in appropriations. Until further notice, the EIA.gov website will continue to be updated, and publications will continue to be released according to established schedules. EIA will continue collecting energy data from survey respondents as scheduled."
- We don't expect any other "official" confirmation of other federal data cancellations, as theoretically there are no non-essential employees at the agencies to available to publish any notices.
- However the individual shutdown contingency plans at the major government agencies each say that there will be no data updates, including for the BLS (nonfarm payrolls, CPI), with the Labor Secretary verbally confirming that there would be no releases in a news show appearance Tuesday.
- For example you have to look under the Commerce Dept's shutdown document to see that for the Census Bureau (which publishes Construction spending): "Economic Indicators: U.S. monthly economic indicators would not be available. " But on the Census.gov site it still shows the data as publishing today.
- The "official" schedules are likely to remain unchanged on the websites until after the shutdown is over.
- The next "test" will be Thursday at 0830 when weekly jobless claims are scheduled. The Department of Labor's shutdown plans suggest there will be no weekly jobless claims reports published. But these were published in 2013's shutdown, as while they were compiled and released by the BLS, they use state-by-state data. Again, we don't expect to get a release this week.
BONDS: Initial Resistance Untested
Even though bonds remain underpinned in the wake of the softer-than-expected U.S. ADP employment data, with steepening biases apparent across the U.S., German & UK curves, it is worth noting that TY, Bund & gilt futures have not tested their initial resistance levels of note (113-00, 128.82/84 & 91.28, respectively).
- Meanwhile, the recovery/rally in equities helps bias peripheral EGB & OAT spreads to Bunds tighter on the day.
