EU TRANSPORTATION: Mobico | Moody's on-review for downgrade (x2)
(MCGLN; Ba2 On-Review Dwg now/NR/BBB- Stable)
Flags gross leverage at 7.2x, ICR below 1x, FCF negative (on it's adjusted) and uncertainty on renewal of a long haul concession contract in Spain due 2027.
Not often we see this but it has said the review could "lead to a multi-notch downgrade"
The junking itself was double-notch last year (Baa3 to Ba2).
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BONDS: Tnotes/Bund spread extends its wideningh bias
- Tnotes/Bund spread is slowly clearing the 175.00bps level, edging towards 10bps wider on the day.
- Next upside target is seen at 182.3bps, the 50% retrace of the Dec/Mar range.
- Govies have been more steady in the past couple of hours but they continue to see heavy two way Volumes.
(Chart source: MNI/Bloomberg).
OUTLOOK: Price Signal Summary - Bear Threat In Equities Remains Present
- In the equity space, S&P E-Minis remains intact. Scope is seen for an extension towards the 4800.00 handle next. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend and bearish market sentiment. Initial firm resistance is seen at 5554.41, the 20-day EMA. Short-term gains are for now, considered corrective.
- EUROSTOXX 50 futures remain in a bear cycle following the latest impulsive sell-off. Monday’s move down resulted in a breach of a key support at 4699.00, the Nov 19 ‘24 low (cont). This exposes 4372.46, the 76.4% retracement of the Oct ‘23 - Mar ‘25 bull cycle (cont). The contract is oversold, a recovery would allow this condition to unwind. Initial resistance is 4910.00, the Apr 7 high.
UK: FT-Reeves Says 'Imperative' To Reset EU Relations Amid Trump Tariff Barrage
Speaking to the FT, Chancellor of the Exchequer Rachel Reeves says that the trade war launched by US President Donald Trump makes it more "imperative" that the UK improves political and economic relations with the EU. On 19 May, the UK and EU hold a summit intended to 'reset' relations with the EU. Reeves says the summit will offer an opportunity “to refresh our relationship and make it easier for businesses to trade”.
- Reeves: “Many of the developments, whether it is Russia’s invasion of Ukraine or the challenges in global trade at the moment, mean that there’s an even greater imperative to improve our trading relationships with Europe.”
- While saying that the UK will not rejoin the customs union, the article says that the chancellor "has proposed that Britain should align its regulations covering established industries, such as chemicals, with Brussels rules to enhance market access."
- Reeves says she will look to negotiate further on a trade deal with the US when she visits Washington, D.C., later in April for the IMF meeting of global finance ministers.
- FT says Reeves not drawn on tax hikes/spending cuts in autumn budget. Says "Economic stability, fiscal stability, is the key underpinning for a strong and growing economy, and that’s why we are, as a government, so committed to those fiscal rules.”
