EU CONSUMER CYCLICALS: Kering: Valentino Debt Covenant Breach (bbg)
(KERFP; NR/BBB+ Neg)
Below implies Valentino earnings are still falling after the 21% fall last year and 30% fall vs. 2023 (when Kering first took a 30%/€1.7b stake). It gives context on why majority owner Mayhoola may have pushed back a sale to Kering. The quoted net debt amount of €1.1b incl. leases does not point to Valentino being highly levered; net 4.4x on last years earnings vs. Kering itself at 3.8x. Financials are not consolidated into Kering, instead accounted as equity stake under which it dragged a small €11m off Kering's €1.2b in net income. Options that may force Kering to buy remaining 70% now pushed back to 2028. We do not see it as a major mover for the credit story.
- "First breached its covenants in December, the people said, but performance has worsened with a significant deterioration in earnings during the first half of 2025."
- "The bulk of the Valentino’s debt is made up by a €530 million ($619 million) financing provided last year by a pool of banks"
- "Including leasing liabilities, Valentino’s net debt stood at €1.08 billion as of Dec. 31." bbg
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EURUSD TECHS: Pierces Pivot Support At The 50-Day EMA
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1743 High Aug 22
- PRICE: 1.1586 @ 14:43 BST Aug 27
- SUP 1: 1.1574/1.1528 Intraday low / Low Aug 5
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
The trend set-up in EURUSD remains bullish and short-term weakness is for now considered corrective. However, the pair is trading lower today and has pierced key support at the 50-day EMA, at 1.1599. A clear break of the average would signal scope for a deeper retracement and potentially expose key M/T support at 1.1392, the Aug 1 low. For bulls, a resumption of gains would open key resistance and the bull trigger at 1.1829, the Jul 1 high.
US TSY FUTURES: BLOCK: Dec'25 2Y Sale
- -5,000 TUZ5 104-07, post time bid at 0937:01ET, 104-07.12 last -0.5)
EQUITY TECHS: E-MINI S&P: (U5) Northbound
- RES 4: 6600.00 Round number resistance
- RES 3: 6586.68 2.0% 10-dma envelope
- RES 2: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6508.75 High Aug 15 and all-time High
- PRICE: 6478.50 @ 14:32 BST Aug 27
- SUP 1: 6362.75 Low Aug 20
- SUP 2: 6313.25 Low Aug 6
- SUP 3: 6311.73.76 50-day EMA
- SUP 4: 6239.50 Low Aug 1
The dominant uptrend in S&P E-Minis remains intact and the contract is trading at its recent highs. Moving average studies are in a bull-mode position, highlighting a clear uptrend and positive market sentiment. Attention is on 6508.75, the Aug 15 high and the bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 6523.63, a Fibonacci projection. Support to watch lies at 6311.73, the 50-day EMA.
