CONSUMER STAPLES: Barry Callebaut; 1Q results (to Nov)

2x ERG5 98.25 calls lifted vs. 1x ERF5 97.87 calls, with paper paying 1.0 on 6.25K for the G5. ERH5 last 97.705.

Moving inline with the weakness for European bonds, the single currency has edged lower to be the session's poorest performer, although price action remains muted and ranges well contained.

• Having traded 0.8315 overnight, EUR/GBP is back to negative on the day - having reversed ahead of any test on the 50-dma at 0.8319 - a level markets have failed to break on three occasions in the past week or so.
• EUR/NOK is lower for a second session, extending the reversal off the post-Norges Bank high to just over 1%. Rate is now meeting support at the confluence of the 50-, 100-dmas of 11.7666/65.
• The greenback is more mixed. The USD Index is very mildly higher, but is holding the majority of Friday's slippage - leaving 108.541 the key level ahead.
• As a gauge of lighter volumes and limited liquidity today: EUR futures have traded volumes ~20% below average for this time of day, GBP ~50% lower and JPY ~40% lower.

Goldman Sachs’ new yield forecasts point to “around 20bp of further U.S. Tsy/Bund spread widening from current levels, given the sound foundation of economic divergence.”

• They suggest that “European fiscal support either at the country-level or area-wide level is likely to be modest, and unlikely to alter the 2025 cyclical outlook.”
• “Likewise, while the ECB is shifting in a more dovish direction, recent communication again underscored the lack of urgency to support the economy.”
• However, they caution that “the spread widening already embedded in curves suggests that a relatively protracted period of relative economic weakness in the Euro area is increasingly well-priced, and that risk-reward has become more balanced from a cross-market perspective with the UK or U.S”
• This leads them to conclude that “the clearest path to lower European yields in the near-term may be relief from global duration where pricing, in our view, has turned too bearish in the last month.”