CAPITAL GOODS: Parker-Hannifin (PH A3[P]/BBB+/A-): New Issue FV
Feb-07 12:52
- EUR Benchmark 5Y Fixed MS+105-110.
- This issuance will refinance the 03/25 bonds.
- PH 25s typically traded ~20bp wide to ETN 25s historically; it did get an upgrade to A3 yesterday from Moody’s and remains on positive outlook. It has marginally higher leverage than ETN, but Moody’s expects that to continue to come down. It does have history of M&A followed by deleveraging cycles which is a risk to consider.
We see FV at MS+75a, in line with the ETN curve.
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US TSY FUTURES: BLOCK: Mar'25 2Y/10Y Steepener
Jan-08 12:49
- Latest Block crossed at 0724:55ET:
- +2,500 TUH5 102-22.12, post time offer vs.
- -3,000 TYH5 107-30, through 107-30.5 post time bid
- The 2s10s curve has climbed to 41.621 this morning, highest since May 16, 2022
GBP: EURGBP Rally Highlights Potential for Stronger Reversal
Jan-08 12:44
- Despite the underlying dollar bid, the underperformance for UK assets has prompted a solid uptick for EURGBP on Wednesday, and a firm break above resistance at 0.8311, the 50-day EMA.
- We have reached a high of 0.8348 so far, and this represents a six-week high for the cross. Price action today undermines the dominant bear theme and highlights the potential a stronger reversal. Further weakness below the 2024 highs in cable would likely add to the topside momentum in EURGBP.
- Above here, the focus will be on 0.8376, the Nov 19 high and technical bull trigger.
BUND TECHS: (H5) Clears Key Support
Jan-08 12:43
- RES 4: 137.75 Low Dec 10
- RES 3: 135.15 High Dec 13
- RES 2: 133.90 20-day EMA
- RES 1: 132.57/133.48 High Jan 6 / 3
- PRICE: 131.55 12:27 GMT Jan 8
- SUP 1: 131.50 Intraday low
- SUP 2 131.28 Low Nov 14 ‘24 (cont)
- SUP 3: 131.00 Round number support
- SUP 4: 130.58 Low Nov 6 ‘24 and a key support
The trend cycle in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has breached key support at 132.00, the Nov 6 low. A clear break of this level strengthens a bearish theme. Sights are on a move towards 131.28 next, the Nov 14 low on the continuation chart. Initial resistance is at 132.57, the Jan 6 high. Key short-term resistance is at 133.90, the 20-day EMA.
