EU COMMUNICATIONS: Poste Italiane TITIM Stake Announcement Could Come Saturday
Article notes that Meloni has “fended off” CVC interest in Vivendi’s stake which is a positive given the sensitivity TITIM has shown. Most lines have already pared widening to within 10bp of last Thursday levels though the 1.625% 29s are still 20bp wider.
- BBG sources reporting that a deal to swap state lender CDP’s 10% TITIM stake for Poste Italiane’s 4% Nexi stake could be announced on Saturday. Headlines earlier in the week had alluded to such a swap. Cash adjustment required.
- “Poste’s board will review the plan on Saturday and is expected to announce a decision that day.”
- “Meloni’s government earlier this week fended off an offer by CVC to buy a stake in Telecom Italia held by Vivendi SA…The purchase could have paved the way for a merger with Iliad.”
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GILTS: Just Off Highs, 10-Year Supply Eyed
Futures just below session highs, last +76 at 90.01.
- Front end of the curve continues to outperform, driven by dovish repricing in the short end following this morning’s CPI data.
- Yields 6.5-10.5bp lower, 10s still ~25bp above end of ’24 levels.
- Impending 10-Year supply will be viewed as a litmus test for wider gilt demand. A reminder that yesterday’s 30-Year I/L supply passed smoothly.
- This morning’s CPI data outcome could promote greater demand at that auction, even with yields back from cycle highs.
FOREX: BofA Recommend Buying 3m USDCHF Call Spread
BofA yesterday recommended a 3m 0.92/0.9450 USDCHF call spread, citing "trade uncertainty, strong growth and policy divergence" behind a stronger Dollar alongside bullish technical conditions and a forward discount / carry factors supporting the position.
- For technical levels, they identify 0.9240, 0.9455 (Fibonacci retracement), 0.9720, and potentially parity, while as risks, they see USD losing the "broad-based bullish momentum" in Q1'25. They believe if their "core view of a stronger USD at the onset of 2025 turns out to be right, USDCHF would likely have the least number of reasons to reverse its short-term uptrend."
- A reminder that Danske data released earlier this week suggests positioning is pronouncedly long on the pair.
SWEDEN: Some Signs Of Labour Market Stabilisation In PES Data
The Swedish unemployment claims rate, produced by the Public Employment Service was steady at 7.0% in December, helping the 3mma tick up to 7.0% from 6.9%.
- Although total vacancies rose ~10k from November’s levels, they remain down 16% from a year ago.
- There was a ~1k rise in employee redundancy notices, but the 3mma fell below 5k for the first time since June 2023.
- As such, there may be some early evidence that Swedish labour market weakening is beginning to slow. However, further data is required in both the PES and LFS data in the coming months to signal a stabilisation in conditions. December LFS data is due next Friday.
