EU FINANCIALS: Monte dei Paschi €500m WNG 10.25NC5.25 Tier 2 - FV
Jun-25 08:15
- IPT: MS+235
- FV: MS+227
- From MONTE 7.708% 2028 - Z+ 180
- we add 20 bps for the bullet vs NC structure of the new bonds - this is somewhat generous if we look at our T2 bullet vs callable analysis, although the existing MONTE T2 looks wide for its rating.
- Alternatively we think monte trade 10-20bps wide of BPEIM T2 in a similar structure due to the 1 notch lower rating
- We add 10bps per year of extension - 27bps
- From MONTE 7.708% 2028 - Z+ 180
- Exp. Ratings: Ba2/-/BB-
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SOFR: OPTIONS: SFRU5 97.00 Calls Lifted
May-26 08:06
SFRU5 97.00 calls paper paid 2.5 on 3K.
BOBL: Futures Blocked
May-26 08:04
OEM5 5,963 lots blocked at 118.860, looks like a buyer based on prevailing quotes but Subsequent price action points to a seller. DV01 ~EUR370K.
SCANDIS: Important Supports Being Tested Across Scandi Crosses
May-26 07:58
Important supports in Scandi crosses are being tested this morning, clearance of which could extend recent outperformance against the broader G10 basket. The improved risk backdrop following the US/EU 50% tariff delay has provided a tailwind to NOK and SEK today, though the Scandis also traded resiliently in the wake of Trump’s initial tariff announcement last Friday.
- This suggests the broader theme of rotation out of the USD is continuing to benefit NOK and SEK (alongside the EUR) as has been the case through this year.
- Key near-term supports to watch:
- EURSEK (-0.3% today at 10.8010): April 4 low at 10.7941. A clear breach of this would expose 10.6652 (April 3 and multi-year low).
- USDSEK (-0.5% today at 9.4820): April 22 low at 9.4704.
- EURNOK (unch today at 11.4830): May 23 low at 11.4621. The cross has pared around 80% of the sharp 8.55% rally seen between April 2 – April 11
- USDNOK (-0.5% today at 10.0690): December 2023 low at 10.0562, clearance of which would expose the July 2023 low at 9.9249.
- The last week’s price action still leaves an uptrend in NOKSEK intact, with the uptrend drawn from the April 9 low underpinning the cross, helping narrow the gap to the key 0.9500 medium-term pivot level.
- This week’s Scandi calendar is heavy, with activity data due from both Sweden and Norway. While a June Norges Bank cut seems highly unlikely at this stage, a weak set of Swedish readings could tilt the balance in favour of a June Riksbank cut to 2.00%.
