REAL ESTATE: Property Week In Review
Aug-30 14:43
- Real Estate the strongest performing sector this week, outperforming the rest of the market by ~5bp.
- Two deals in the sector this week; Equinix issued EUR 600mn of 2033s that tightened 30bp to price at MS+120bps with a cover of 1.7x and a NIC of -3bp. TAG Immobilien issued EUR 500mn of 2030s that tightened 35bp to price at MS+190bp with a cover of 4.5 and a NIC of 0bp.
- We saw rating action in the form of an outlook upgrade for Castellum at Moody’s, citing strong rental income and expected credit metric improvements. Net debt/EBITDA is expected to hover ~10x with gross debt to assets seen close to 40% and ICR to 3.5x. Thresholds for upgrade are gross leverage towards 40%, ICR above 3.5x sustainably and a declining trend in net EBITDA leverage. Short debt maturity remains a concern.
- Aroundtown has performed strongly in the wake of broadly stable Q2 results accompanied by a slight guidance upgrade; https://marketnews.com/aroundtown-q2-looks-broadly-stable-to-q1-ffo-i-guidance-upgraded-slightly.
- Heimstaden Bostad a issued a 3-year SEK 1.1bn FRN at 3m Stibor + 240bp, upsized from SEK 500mn. Despite the small deal size, it signals market access and is their first deal in over two years.
- Elsewhere, LEG Immo issued EUR 500mn in convertibles with the proceeds to be used for refinancing upcoming maturities. SATO Oyj, in which Fastighets AB Balder, has a stake of over 50%, completed a EUR 250mn tap of its EUR 30s. CPI Property report after the close and announced this morning that the probe found no evidence of the Muddy Waters claims.
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SOY TECHS: (X4) Southbound
Jul-31 14:42
- RES 4: $1270.25 - High Dec 28
- RES 3: $1230.50 - High May 7 and key resistance
- RES 2: $1201.50 - High May 31
- RES 1: $1106.13/1133.75 - 50-day EMA / High Jul 5
- PRICE: $1021.50 @ 15:31 BST Jul 31
- SUP 1: $1018.00 - Intraday low
- SUP 2: $1009.63 - 4.0% 10-dma envelope
- SUP 3: $1000.00 - Psychological round number
- SUP 4: $990.44 - 1.236 proj of Nov 21 ‘23 - Feb 26 - Jun 7 swing
Soybean futures remain in a downtrend and recent weakness confirmed a resumption of the medium-term bear cycle. Note that moving average studies are in a bear-mode set-up too and this continues to highlight a clear bearish trend sequence. Scope is seen for a move towards the $1000.00 psychological handle. Initial firm resistance is $1106.13, the 50-day EMA. Short-term gains are considered corrective.
EQUITIES: Global Trade Optimism Adds Further Tailwind for Stocks
Jul-31 14:40
- Equities continue to grind higher an hour following the cash open, with the e-mini S&P comfortably clear of last week's highs and narrowing in on 5585, the next resistance and Jul24 high.
- The US exempting firms from allied countries in their chip export rules continues to be a boon for the sector, which comfortably tops stock markets from Europe to the US. NVidia leads the gains with an 11% rally today alone (adding over $300bln in market cap today alone).
- This isn't the first piece of positive news on global trade we've had this week - just yesterday the USTR confirmed a delay to the new tariffs on Chinese goods by at least two weeks - tariffs that were set to cover both the semiconductors sector as well as electric vehicles.
- 5577.1 is a key level for the index ahead - marking the 50% retracement of the pullback off the alltime and contract high of 5721.25 in mid-July.
CANADA: USDCAD Through Support As Equites Gain
Jul-31 14:35
- Equity futures extending highs helps tilt USDCAD a little lower still as it extends post CAD GDP/US ECI moves.
- Touching as low as 1.3787, the pair has pushed below support at 1.3797 (Jul 25 low), opening 1.3749 (20-day EMA) and 1.3707 (50-day EMA).
- Tomorrow’s option expiry remains on the lighter side with the FOMC decision still to come today, with $450m at 1.3795 for the more notable of nearby strikes.
- Recall the heavy CAD net short backdrop, with CFTC data showing a historically large 51% of OI the day before last week's BoC decision.
Source: Bloomberg
