EU UTILITIES: UTILITIES: Week in Review
Jul-26 2024 13:26
- Utilities spreads performed in-line over the week. At the risk of sounding like a broken record, Thames Water dominated once again. Price convergence was the theme; 32s up 1.75pts on the week to 69.25, others 1.5-2.25pts lower in a 71-74.50 price range. Bonds were under pressure before the 2-notch downgrade from Moody’s; that triggered a 3-4 point drop but bonds have bounced and now trade higher than before that action. We think the 70c point is in focus for some investors with haircuts unlikely to exceed 30c. Perversely, in our view the downgrade could be a positive for bondholders if it triggers SAR sooner. If SAR is inevitable, we would argue the sooner it happens the better, with less emergency cash required from the government.
- Severn Trent braved the £ market with a new issue and will have been pleased to get that done with the sector in the spotlight, although it came at the cost of ~15bp secondary widening and large NIC. Euro bonds were barely affected.
- Enel, Italgas, Terna and Stakraft earnings were mostly firm but uneventful. Iren, EDP, Origin Energy, Snam, Southern, Engie and ERG report next week.
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US TSY FLOWS: Testing new intraday lows
Jun-26 2024 13:26
- US Tnotes sees ~10k sold to print a new intraday low, , followed by another 8k.
- Immediate support is still 110.01+
- No spill overs into Bund as of Yet, with the German contract holding at 132.20.
SOY TECHS: (X4) Bear Cycle Remains In Play
Jun-26 2024 13:22
- RES 4: $1271.19 - 76.4% of the Nov 21 ‘23 - Feb 26 bear leg
- RES 3: $1242.81 - 61.8% of the Nov 21 ‘23 - Feb 26 bear leg
- RES 2: $1230.50 - High May 7
- RES 1: $1168.56 - 50-day EMA
- PRICE: $1110.75 @ 13:44 BST Jun 26
- SUP 1: $1107.00 - Low Jun 25
- SUP 2: $1100.00 - Psychological round number
- SUP 3: $1082.06 - 0.764 proj of Nov 21 ‘23 - Feb 26 - Jun 7 swing
- SUP 4: $1036.25 - 1.00 proj of Nov 21 ‘23 - Feb 26 - Jun 7 swing
Soybean futures remain soft. Last week’s move down reinforces a bearish theme. The recent break of support at $1146.75, the Apr 19 low, and a key support at $1122.75, the Feb 26 low, strengthens a bearish theme. Moving average studies have crossed and are in a bear-mode set-up, highlighting a downtrend. Sights are on the $1100.00 handle. Initial resistance is at $1172.50, the 50-day EMA.
SNB: Schlegel Announced as SNB President
Jun-26 2024 13:19
Martin Schlegel will be appointed as the next SNB president, succeeding current President Jordan by the end of September.
- This was widely anticipated following media reports.
- President Jordan will still be in place during the next SNB meeting on September 26.
- Schlegel did not appear distinctly more hawkish or dovish than Jordan historically, so there is no stark shift in policy to be expected. Schlegel highlighted "commitment to price stability" in an ongoing press conference on the announcement.
- Petra Tschuldin, currently alternate member of the enlarged governing board, will join the three-member (main) governing board, making up for the empty seat Jordan leaves.
Press conference: https://www.admin.ch/gov/de/start.html
