EU FINANCIALS: Fitch upgrades Ibercaja to BBB+
Feb-28 15:27
Main Drivers
- Small, diversified franchise
- NPL's of 1.6% and remain below 2%
- OpInc/RWA to remain between 2.5x - 3x
- CET1 to be towards the upper end of management 13.5-14% range by 2026.
Downgrade threshold
NPL > 3%, OpInc/RWA < 1.5x
Upgrade threshold
NPL well below 2%, CET1 well above 14%.
New Fitch Ratings
- Sr Pref - BBB+
- Sr Non Pref - BBB
- Tier 2 - BBB-
- AT1 - BB
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Historical bullets
EURIBOR OPTIONS: Call Fly buyer, the Call Spread trades for more
Jan-29 15:26
- ERM5 98.00/98.12/98.25c fly, bought for 1.25 in 20k.
- For the ERM5 98.12/98.25cs, this has now been bought for half in 79.5k.
CANADA: Dovish Rates Reaction To BoC Gains Ground, FX Unfazed
Jan-29 15:26
- 2Y GoCs have extended a dovish reversal of what was initially, and only briefly, a small hawkish reaction to the BoC statements.
- 2Y yields are now 3bp lower for -5.5bp on the day, setting new lows since 2022 in the process.
- It sees the Can-US 2Y differential fall to fresh multi-decade lows of -142bps (-3bp post-decision, -5.7bp on the day).
- BoC-dated OIS currently shows a rough 50/50 call for a 25bp cut or pause with the March decision, whilst CORRA futures are 2.5-3bp lower across the curve implying a terminal of 2.5-2.55% depending on spread assumptions.
USDCAD meanwhile, at 1.4440, is still within a few pips of pre-announcement levels, remaining below the session high of 1.4472 and resistance at 1.4516 (Jan 21 high).
EQUITIES: EU Bank Index trades at a new 9.5 years high
Jan-29 15:20
- A new 9.5yrs high for the Bank index (SX7E), so far printed a 162.75 high, and edging closer to the 163.00 handle, with main level in focus coming at 163.34, the 2014 high.
- The Tech sector is nonetheless still leading today in Europe, up 3.18%.
