EU CONSUMER STAPLES: Barry Callebaut; dispute with local exporters
(BARY 29s; Baa3/BBB-; Stable)
The headline may look worrying, but this is more structural. Firstly local exporters historically accounted for a small amount of total exports (references generally ~10-20%). Barry likely uses local collectives, like GNI mentioned below, for additional volume (it will be restricted on how much it can export itself). Barry is one of the largest exporters out of Ivory, it is normal for it to be mentioned in these articles (generally next to Cargill - who is not in this case - but Olam is another large multinational).
More broadly the regulated prices by the government have been a big issue - many blame it for not allowing supply to adjust to demand/prices. Barry (and others) will not be allowed to pay above the regulated price.
"A group of local shippers wants the nation to allow them to export cocoa initially destined for Olam and Barry Callebaut to other clients, said the people, who asked not to be identified because the discussions are private. The request comes after the two traders refused to pay more than the price set by the regulator, the people said." -bbg
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USD: EUR and the Pound are testing their intraday lows
- The EUR and the Pound are falling back to where they fell Overnight post Trump's Tariffs headline, both EURUSD and Cable are back to their overnight intraday lows.
- Not Yet seeing any broader moves versus G10s at least.
- Small support in Cable comes at 1.2222, and a push all the way down to ~1.2186 would reverse Yesterday's WSJ story on Tariffs.
- EURUSD would need to drift to 1.0320 to reverse that move.
EGB SYNDICATION: 5/15-year LITHUN EMTN: Guidance
- EUR Benchmark 5Y Fixed (Jan. 28, 2030) MS+70 Area
- Coupon: Annual, act/act ICMA
- EUR Benchmark 15Y Fixed (Jan. 28, 2040) MS+145 Area
- Coupon: Annual, act/act ICMA
- Issuer: Lithuania Government International Bond (LITHUN)
- Settlement: Jan. 28, 2025
- Bookrunners: BNPP (B&D), BofA, JPM
- Co-Lead (no books): SEB Lithuania
- Investor presentation.
- Timing: May price today.
Details as per Bloomberg
OPTIONS: Two-Way USD Risk, Duelling Tariff Headlines Trigger Sizeable Flow
- Yesterday's FX derivatives volumes were seriously impressive considering the US market holiday, with over $110bln notional crossing the DTCC thanks to the USD sell-off, with tariff target currencies (namely EUR, CAD and CNY) leading the way.
- While relief was evident in the spot rally for EUR, CAD and others - short-end vol markets have not followed, with USD risk reversals and butterfly vol holding at much more cautious levels, somewhat vindicated by the follow-up from Trump overnight and his warning of 25% tariffs on USMCA nations to combat migration flow.
- As such, while USD/CAD sold off on the initial memo headlines yesterday, net upside demand via options is still evident, tipping the put/call skew toward calls. Over $4bln notional has traded in calls with strikes at 1.45 or above, positions which will have benefited from the bounce off the 1.4262 low yesterday.
- This raises the risks around Canadian politics, and increases the importance of Trudeau's succession, with tariff strategy comments on the candidates' campaign trail likely market movers.
