EU TRANSPORTATION: PostNL: Government Collapse
Jun-06 12:25
(PNLNA; -/BBB-/-)
While negative at the margin, we don’t see this as a meaningful credit mover and is more of an equity story. Hopes were not particularly high for support, although some reforms may have been more likely. Elections are scheduled for late October.
- PostNL equity is lower today. A bearish piece from Kepler Cheuvreux was reported, citing the collapse of the Dutch government as negative.
- PostNL had previously requested government support, as it is subject to Universal Service Obligation while seeing falling volumes. Parliament is unlikely to engage on such issues in the interim.
- Previous reports suggested the last government had rejected the request for the time being.
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US: MNI POLITICAL RISK - Bessent Tees Up Trade Talks With China
May-07 12:18
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- President Donald Trump will receive an intelligence briefing in the morning before meeting Vice President JD Vance for lunch in the afternoon. Asian markets will be watching for a signal on how the White House will approach escalating hostilities between India and Pakistan.
- After upending transatlantic ties at the Munich Security Conference in February, Vance will speak at an event today hosted by the same organisation.
- Markets will be monitoring Trump’s Truth Social account for his response to the Fed's rate decision.
- Treasury Secretary Scott Bessent is on Capitol Hill again today to give his 'Annual Testimony' to the House Financial Services Committee. Bessent and USTR Jamieson Greer are aiming to dial down tensions with Beijing at their first official talks with Chinese counterparts this weekend.
- The US trade deficit rose in March as US businesses stockpiled goods.
- Trump struck a conciliatory tone with Canadian Prime Minister Mark Carney but downplayed the prospect of a trade deal.
- The budget ‘Big Six’ will meet at Treasury today as Republican leaders struggle to get moderates and conservatives on the same page on reconciliation spending cuts.
- Senate Majority Leader John Thune (R-SD) is expected to hold a Thursday vote on a landmark crypto bill.
- Trump announced a truce with the Houthis and teased a "very big announcement" ahead of his Middle East trip.
- Poll of the Day: The economy is a “liability” for Trump despite a stabilisation of his approval.
Full Article: US DAILY BRIEF
PIPELINE: Corporate Bond Roundup: Athene Global Funding 2Pt on Tap
May-07 12:16
- Date $MM Issuer (Priced *, Launch #)
- 05/07 $Benchmark Athene Global Funding 3Y +125a, 3Y SOFR
- $24.9B Priced Tuesday led by $5B BoA 3pt. Total issuance for the week at $38.7B
US DATA: Mortgage Rate Lending Standards Tighten A Little Further
May-07 12:05
MBA composite mortgage applications unsurprisingly received a boost from lower rates this week although there was limited passthrough to mortgage rates in a further tightening of lending standards.
- Composite applications increased 11% last week (sa), leaving them back close to where they were in late March having jumped 20% in the first week of April as rates tumbled following Apr 2 tariff announcements before subsequently declining 23% over the next three weeks.
- The breakdown by new purchases and refis follows a similar pattern, just with refis mostly more volatile.
- A reminder of relative levels: composite applications at 53% of 2019 levels, new purchases at 63% and refis at 42%.
- The 30Y conforming rate fell 5bp last week to 6.84% (lowest since week of Apr 11) vs a 13bp decline in the average 10Y swap rate through the week (although the average of 3.69% came with a wide range of 3.59-3.79%).
- The 30Y conforming to 10Y swap spread of 315bp is up from sub-280bps in late February for its highest since Feb 2024.
