CONSUMER STAPLES: Sudzucker; profit warning
(SZUGR; Baa2 Neg/BBB Neg)
- Expects "significant decline" in EBITDA and EBIT for 1Q26 (3m to May) vs. last years levels (EBITDA €230m, EBIT €155m) - which were already down -35%/-45% vs. 2023 levels.
- It has still kept FY guidance unch for EBITDA €525-675m (midpoint -16%yoy) and EBIT €150-300m (midpoint -34%yoy).
- again FY guidance is contingent on EU sugar prices moving higher from current lows
We already saw downgrade risk on FY26 guidance, outlook there we said was uncertain and dependent on where the weakness came from (it will release full results on 15th May). 32s are retail denominated and will likely need HY ratings to take a step wider - we will circle back if we see a double notch downgrade risk.
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FOREX: EURUSD Consolidating Above 1.0900, Rabobank Look for 1.1200
- The EURUSD rally lost steam late Tuesday as markets shrugged off Ukraine agreeing to a 30-day truce and the greenback more broadly recovered. Yesterday’s peak of 1.0947 coincided with the pair completing its recovery to the US election related highs at 1.0937, with the bounce from last week’s lows totalling 5.55%. Spot also substantially narrowed the gap to resistance at 1.0961, the 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg.
- While US CPI will be the significant driver of short-term sentiment, the technical uptrend is overbought, and a pullback would allow this set-up to unwind. Support remains much lower at the prior breakdown point of 1.0668.
- The EU announced €26bn worth of retaliatory tariffs against the US, however the brief EURUSD dip below 1.0900 has been well supported and the pair has been consolidating above the figure as we approach the data.
- Waning global risk sentiment in recent weeks has allowed the single currency to also outperform in the crosses, and EURAUD remains a standout here, having extended its 3 week bounce to 6.5% at its peak on Tuesday. An appreciation today would extend an uninterrupted winning streak to 14 sessions.
- An update of some short-term EURUSD analyst views to follow.
GERMAN AUCTION RESULTS: 10-year Bund auction better than yday, but still soft
A better 10-year Bund auction than yesterday's Schatz auction - but still relatively soft.
- The stop price was above the pre-auction mid-price (unlike yesterday) and broadly the same amount was allotted as in the February auction.
- However the volume of bids was smaller than previously and led to lower bid-to-cover and bid-to-offers.
- In fact the volume of bids was the smallest at a 10-year Bund auction since December (a month when bids are normally a little lower). Bids were similar in October last year and the last time they were lower (ex-Dec) was June last year.
- The price of the 2.50% Feb-35 Bund fell a little post-auction results.
US TSY FUTURES: Short Setting Seen Across Much Of Curve On Tuesday
OI data points to net short setting across most contracts on Tuesday, with FV futures once again seeing the largest positioning swing.
- Only modest long cover in UXY futures broke the wider theme.
| 11-Mar-25 | 10-Mar-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 3,915,055 | 3,883,551 | +31,504 | +1,243,953 |
FV | 6,245,246 | 6,173,325 | +71,921 | +3,159,198 |
TY | 4,700,117 | 4,698,104 | +2,013 | +130,039 |
UXY | 2,216,680 | 2,227,328 | -10,648 | -952,498 |
US | 1,770,567 | 1,766,363 | +4,204 | +550,412 |
WN | 1,760,309 | 1,759,527 | +782 | +153,333 |
|
| Total | +99,776 | +4,284,439 |
