EU FINANCIALS: Just Group (JUSTLN) - FY Results
FY results are positive. Solid new business growth, margins and SII maintained, cash generation now expected to grow in line with assets.
Increased gilt yields and current pensions regulations has meant that the market pro DB buy in/outs has grown meaningfully. While this creates a profit opportunity it also creates tension in the form of rapid new business stain cash outflows (£71m in 2024, up from £35m in 2023) and CSR growth - as well as the temptation to give up margin (8.7% in 2024, -0.4% YoY).
- Targeting up to £60bn p.a. DB buy in/outs over next decade, compared with an average of £25bn per year over the previous one.
- New business profit increased to £460m in 20024 (+34% yoy), driven by DB, while the GlfL/care segment shows steady growth.
- SII Ratio climbs 7% to 204%. 119bps of generation offset by -71bps of CSR growth. Dividends only contributed -23bps.
Valuation
Just tier 2 bonds trade relatively wide for their BBB rating at Fitch, although about in line with other similar speciality insurers. They have rallied -13bps qoq, compared with the broader t2 market that is -30bps tighter.
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USD: Early selling interest noted
- The Dollar sees a flat session overall against G10, but there's a couple of standout Currencies, the Yen is up another 0.74%, and the Kiwi continues to recover from its worst printed levels since 2022, now has now bounced 2.77% in the past 2 sessions.
- The Yen stands out once again the fall in Yield combined with a Wage beat in Japan overnight sees the Currency up 0.74% into the European session.
- The next immediate support in USDJPY was seen at 153.16, so far holding, although did print a 153.10 low overnight and we are testing that area once again now.
- A clear break through the 153.00 figure will open to 152.55 61.8% retracement of the Dec 3 - Jan 10 bull leg.
GOLD TECHS: Impulsive Bull Wave
- RES 4: $2917.5 - 1.764 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 3: $2900.0 - Round number resistance
- RES 2: $2867.5 - 1.50 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $2861.9 - Intraday high
- PRICE: $2857.8@ 07:28 GMT Feb 5
- SUP 1: $2807.3 - Low Feb 4
- SUP 2: $2746.5 - 20-day EMA
- SUP 3: $2730.6 - Low Jan 27
- SUP 4: $2698.4 - 50-day EMA
A bull cycle in Gold remains in play. Last week’s extension higher and this week’s appreciation, confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on $2867.5 next, a Fibonacci projection. The first key support to watch is $2698.4, the 50-day EMA. The 20-day EMA is at $2746.5.
BUNDS: Another busy overnight session
- It is another relatively busy overnight session for Bund, with elevated volumes in {us} US Tnotes and the German contract going into the European session.
- Risk remains tilted to the upside for the German Bond on growth concerns in Europe, as well as Technically.
- Bund is now eyeing 133.58, Monday's quick/ fast market high printed on Monday, but better will now be seen at 2.30% in Yield terms.
- The German 10yr Yield printed at 133.86 high, with a 2.309% low on the 2nd January.
- Today sees Services PMIs, but final readings for the major developed countries, so should be taking a back seat.
- Focus will be on the US ISM services, while US ADP is also due.
- US Quarterly refunding will garner interest as well.
- SUPPLY: Gilt 2053 £2bn (Equates to 19.8k Gilt) could somewhat weigh into the bidding deadline.
- SPEAKERS: Fed Barkin (x2), Goolsbee, Bowman, ECB Lane.
