EM CEEMEA CREDIT: Teva: Q2 25 Results – Credit neutral

After displaying signs of plateauing through the first four months of 2025, the Eurozone credit impulse metric of 3mth flows vs 3mths a year ago fell four tenths to 1.5% of GDP in May, the lowest since December. While 200bps of ECB rate cuts have clearly contributed to a recovery in credit growth since Q1 2024, this support now appears to be being countered by persistently elevated trade policy uncertainty. This morning, ECB Vice President de Guindos suggested Eurozone GDP growth may be flat in Q2 and Q3 (below the ECB's June projections), with the economy facing “brutal uncertainty”.

• Private sector lending growth was steady in May, growing 2.2% Y/Y (adjusted for sales and securitisations). Lending growth to non-financial corporates (NFCs) eased a touch to 2.5% Y/Y (vs 2.6% prior), the first decline after five consecutive months of acceleration. Household lending growth resumed its steady uptrend though, rising 2.0% Y/Y (vs 1.9% prior).
• The slow moving 12mth vs prior 12mth credit impulse metric was steady at 1.5% of GDP.
• NFC lending growth fell in Germany (0.3% Y/Y vs 0.7% prior), France (3.2% Y/Y vs 3.4% prior) and Italy (-1.1% Y/Y vs -0.5% prior) in May, but rose in Spain (3.1% Y/Y vs 2.3% prior). Household lending growth was flat in France (0.8% Y/Y), but rose one tenth in Germany (1.5%) and Italy (1.5%) and two tenths in Spain (2.9%).
• Accordingly, the 3mth vs 3mths a year ago credit impulse metric fell in all countries other than Spain, with Germany notably at its lowest since July 2024 (0.2% of GDP).
• German government (and ECB) officials will hope that the expansionary intentions of last week’s budget announcement help catalyse private sector lending and investment to stem this recent trend.
• Eurozone M3 money supply growth was slightly weaker-than-expected at 3.9% Y/Y (vs 4.0% cons, 3.9% prior).

BTCU5 (26th Sep) 180k/185k cs, bought for 20 and 50 in 100 lots.

• In the FI space, Bund futures traded lower Friday, resulting in a print below key short-term support at 130.12, the Jun 5 low. A clear break of this price point would highlight a bearish threat, undermine the recent bullish theme, and signal scope for an extension towards 129.30, the May 22 low. Key resistance has been defined at 131.95, the Jun 13 high. Clearance of this level would reinstate a bullish theme.
• A bullish condition in Gilt futures remains intact and recent weakness appears to have been a correction. Last week’s gains reinforce the current bullish theme. Key short-term support has been defined 92.23, the Jun 16 low. A break of this level is required to undermine a bull theme and signal scope for a deeper retracement. On the upside, sights are on 93.68, the Jun 13 high and bull trigger.