EU BASIC INDUSTRIES: Week in Review
May-23 11:34
- Bouygues was linked with potential consolidation in France, with reports that SFR could be up for sale.
- Wienerberger 1Q was on track, with guidance confirmed.
- Stora Enso executed its planned sale of forest assets. It has further work to do on deleveraging.
- Evonik gave an upbeat outlook at its CMD and intends to bolster its balance sheet.
- Airbus was upgraded to A by Fitch.
- Syensqo issued 6Y and 10Y 13bp wide to our FV. Our credit profile highlighted relatively strong credit metrics.
- Siemens priced a 5-part deal up to 10bp wide to our FV.
Metso priced a small 7Y 8bp wide to our FV. It launched a partial tender for the 27s.
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BOE: Pill asked whether QT is state contingent
Apr-23 11:32
- Pill talks through the history of QT with active sales originally being delayed in 2022. He says: "It does illustrate, first, that, yes, you are right to point out there could be state dependent, state contingent effects. I think we've seen those, but we've built into our framework the possibility for dealing with that. Because I think monetary policy, by nature, is a bit more of a medium term oriented looking through the sort of ups and downs of markets at high frequency. And I think our system has taken that into account. And just to give an example, this isn't what I would overweight, but you'll be very aware of this is it was only a few weeks ago that actually the Bank of England decided to switch from selling longer term bonds to selling shorter term bonds at a time when markets were a little bit febrile, given recent events. Now, I wouldn't say that was a big monetary policy choice that was quite a tactical approach to dealing with these types of dislocations, and I think that maybe at the margin helped to calm markets, although, of course, there are bigger forces at work now. The global storm you see is perhaps driving those dislocations in markets more than our own actions. So I think it does illustrate that we are alive to the potential and able to deal with it."
- Pill says he's not going to formally comment on Bank Rate as the forecast round is under way.
US: Bessent IIF Appearance Could Carry Weight
Apr-23 11:30
- We note the focus on Fedspeak today (although, as we wrote earlier, the ‘opening remarks’-heavy nature of today’s speaking schedule could limit content and all speakers have spoken recently), but Treasury Secretary Bessent's appearance at the IIF today could also carry weight.
- He's set to be delivering keynote remarks and will "share his thoughts on the state of the global financial system". He will then hold a sit-down conversation with the IIF president. His remarks begin at 1000ET/1500BST and can be livestreamed here: https://vimeo.com/event/5054312/12805a306f
- His appearance follow closed-door remarks at an investor conference yesterday, where he supposedly said he sees de-escalation with China, with the current trade situation "unsustainable".
- The softer tone on China (backed up later by Trump) followed a meeting in the Oval Office between POTUS and the CEOs of Walmart, Target and Home Depot, who warned the President "that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves", according to Axios.
EUROZONE ISSUANCE: 7-year BTP Italia to be launched end of May
Apr-23 11:19
- The MEF has announced that it will launch its first BTP Italia since March 2023 with an offering for retail investors between 27-29 May and for institutional investors on 30 May. As usual, the BTP Italia is linked to Italian inflation (rather than Eurozone inflation).
- The guaranteed minimum annual (real) coupon rates will be announced on Monday 26 May (likely ISINs announced then too). There will be the usual 1% bonus to retail investors who hold the issue from launch until maturity.
- The maturity date will be 4 June 2032.
- The last BTP Italia launched in March 2023 had a 5-year maturity and saw E8.563bln sold to retail investors and E1.353bln sold to institutional investors.
