EU CONSUMER STAPLES: Week in Review
Jun-06 12:54
- Spread moves in both sectors were in line with the overall market.
- PVH results flagged high uncertainty for the full year, with margin guidance lowered due to tariffs.
- BAT gave a trading update with a marginal increase to FY revenue guidance.
- Mobico was downgraded to BB+ by Fitch and left on watch negative. A further downgrade is expected after the hybrid call date in February. The business profile has weakened following the NA disposal.
- Wizz Air results and outlook continue to suffer drag from fleet groundings. Credit is underpinned by strong liquidity, with the 26s well covered from cash.
- PostNL was in the spotlight following the collapse of the Dutch government. Any hope for reforms were pushed back beyond October elections.
- Philip Morris issued 4Y and 7Y bonds 18/4bp wide to our FV.
Wesfarmers priced a 7Y 5bp outside our FV.
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US TSY OPTIONS: Large Weekly 5yr Put Option
May-07 12:53
Large Weekly 5yr downside Option:
- FVA (weekly, expiry 12th May) 107.25p, bought for 00+ in ~42.4k.
GILTS: Off Highs, Post-Auction Momentum Stalls
May-07 12:41
Gilts hold the bulk of the rally detailed earlier, backing away from session highs over the last couple of hours after the post-auction momentum stalled.
- Futures have traded as high as 93.32, well shy of next resistance at the May 2 high (93.93). Last 93.24.
- Yields 2-5bp lower on the day, ~1bp off session lows, flattening bias maintained, last week’s yield lows intact/unchallenged across the curve.
- 2s10s ~13bp below closing cycle highs, 5s30s ~8bp below closing cycle highs.
- Spread vs. Bunds continues to oscillate in the 195-200bp closing range witnessed over the last 3 sessions
- Domestic headline flow remains limited, with external cues set to dominate between now and tomorrow’s BoE decision.
BUNDS: German 10yr Yield is nearing 2.50%
May-07 12:28
- Bund is still probing Monday's high of 131.24 (circa 2.5% in Yield), all very gradual, but Volumes have picked up a little, Schatz was bought in 10k, Bobl 5k.
- While extreme moves should still be limited ahead of the Fed, further upside traction opens to 131.71, followed by Friday's gap, up to 131.90 and the big one at 132.03.
- In Yield terms, next support comes at 2.43%, which equates to 132.01, close to that 132.03 level.
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