EU AUTOMOTIVE: Pirelli: 3Q25 Results
Nov-07 09:43
(PCIM; NR/BBB-/BBB)
Credit neutral. Bonds trade in line with one notch higher rated CONGR. That is justifiable; leverage and margins are better. Low diversification is the main constraint, but it is currently favourably exposed to relative trends.
Rumours of Sinochem exiting persist, with reports of advisor appointments today.
- Revenue in line with BBG consensus. LfL growth was 2%.
- Adj. EBIT beat by 3%. Margin improved 40bp YoY to 16.3% with price/mix and efficiency outweighing FX.
- Reported FCF was slightly down at €140m on NWC development.
- Net debt €0.3bn lower YoY at €2.6bn. NFP at €2.5bn; it continues to guide for €1.6bn at FY.
- FY guidance confirmed. It now sees slightly lower volumes offset by price/mix. Demand for high value is proving relatively stronger.
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GILTS: Off Highs, Curve Flatter
Oct-08 09:35
Gilts are off session highs.
- Early cross-market support came from soft German data and some optimism surrounding the avoidance of fresh elections in France, but that move has stalled.
- The ONS has detected errors in the PSNB data, meaning that the UK’s fiscal situation is marginally less downbeat than was previously envisaged, which has probably driven some gilt curve flattening (although the discrepancies are quite minor in the grander scheme of things).
- 10-Year gilts underperform vs. Bunds, spread 1bp wider on the day at ~202bp.
- Futures +18 at 90.72.
- Bears remain in technical control, initial support and resistance located at 90.26 & 91.08, respectively.
- Yields 1bp higher to 1bp lower, 2s10s ~5bp off September closing lows, while 5s30s is ~2bp off its September closing low.
- The GBP5bln auction of the new 4.00% May-29 gilt passed smoothly enough, with the cover ratio comparable to the recent averages of auctions of surrounding lines and a sub-1bp tail generated.
- GBP STIRs little changed on the day, showing ~5bp of easing through year-end. We continue to believe that markets are underestimating the chances of a Q4 rate cut.
- Comments from BoE chief economist Pill are due this afternoon (16:00 London).
- Pill will speak at the Maxwell Fry Annual Lecture at the University of Birmingham. We do not know the subject of the address.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Nov-25 | 3.959 | -0.8 |
Dec-25 | 3.920 | -4.7 |
Feb-26 | 3.816 | -15.2 |
Mar-26 | 3.785 | -18.2 |
Apr-26 | 3.710 | -25.7 |
Jun-26 | 3.687 | -28.0 |
Jul-26 | 3.639 | -32.8 |
Sep-26 | 3.628 | -33.9 |
GERMAN AUCTION RESULTS: 15-Year Bunds
Oct-08 09:34
| 2.60% May-41 Bund | 3.25% Jul-42 Bund | |
| ISIN | DE000BU2F009 | DE0001135432 |
| Total sold | E1bln | E1bln |
| Allotted | E853mln | E733mln |
| Previous | E1.167bln | E782mln |
| Avg yield | 3.06% | 3.08% |
| Previous | 3.03% | 3.00% |
| Bid-to-offer | 2.36x | 0.91x |
| Previous | 1.75x | 2.28x |
| Bid-to-cover | 2.77x | 1.24x |
| Previous | 2.25x | 2.91x |
| Avg Price | 94.38 | 102.24 |
| Low Price | 94.38 | 102.22 |
| Pre-auction mid | 94.327 | 102.172 |
| Prev avg price | 94.68 | 103.25 |
| Prev low price | 94.65 | 103.25 |
| Prev mid-price | 94.620 | 103.200 |
| Previous date | 10-Sep-25 | 06-Aug-25 |
OPTIONS: Expiries for Oct08 NY cut 1000ET (Source DTCC)
Oct-08 09:33
- EUR/USD: $1.1650(E698mln), $1.1700(E1.1bln), $1.1770-80(E1.2bln), $1.1800(E1.5bln), $1.1850-60(E1.0bln)
- USD/JPY: Y146.50($1.2bln), Y147.00($1.5bln), Y149.00($980mln), Y150.00($562mln), Y151.00($799mln)
