EU CONSUMER STAPLES: Revisit to latest on GLP-1/appetite suppressors
With Walmart continuing to flag health & wellness growing mid-teens thanks to GLP-1 pharmacy sales we have revisited the latest on it below.
Recent consumption stats;
- October; PWC survey (3,000 Americans across 49 states) had 8-10% taking GLP-1s, but a further 30-35% interested in using them. Cost is the the most cited reason (by 65%) for not using currently. It saw -11% less spend on food on average with targeted reduction on "sweet and salty snacks and baked goods". Reduction in alcohol consumption was also cited by heavy drinkers.
- December; Cornell published results from a study that saw households with at least one person taking GLP-1 reducing grocery spend by -6% within 6-months (in higher income households -9%).
- Offsetting that it saw a directional increase in nutrition-dense purchases such as yoghurt and fresh produce (see Danone growth).
Local issuer comments;
- 12th Feb: Kraft Heinz (4Q volumes -4%): "no, we have not seen any meaningful impact from GLP-1 in the business."
- 4th Feb: Mondelez (4Q volumes flat, FY -1%); "we've monitored that very carefully, and so far, there is really no effect that we can tell."
- 4th Feb: Pepsi (4Q US snacks volumes -3-6%); "we continue to study GLP, obviously with a lot of detail. And at this point, we see that because of the lower levels of adoption and people coming in and out of the treatment, we see very little impact in our business and in our category at this point."
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UKRAINE: Zelenskyy Calls On Europe To Hit Trump's 5% Of GDP Defence Spending
President Volodymyr Zelenskyy has been speaking at the World Economic Forum annual meeting in Davos. Making his first public comments since US President Donald Trump's return to office, Zelenskyy urges Europe to unify its security and defence policy, adding that Europe 'must establish itself as a strong global player'. Says Russia's deals with Iran and North Korea are 'against Europe and the US'.
- Referring to Trump's demand that European NATO members raise defence spending to 5% of GDP, Zelenskyy says 'If it takes 5% of GDP for Europe to cover defence, then so be it, 5% it is', adding 'Europe must be able to guarantee peace and security for itself and for others.' Zelenskyy claims that 'Real security guarantees for Ukraine will serve as real guarantees for Europe.'
- The call for 5% of GDP to be spent on defence has divided EU members. Poland and Lithuania back the target, even if they are not yet spending at that level. Others have said 5% of GDP would be unachievable without economically devastating tax hikes and spending cuts.
- French President Emmanuel Macron said on 20 Jan “France currently exceeds 2 percent of GDP for defense spending. But is that enough to achieve the mass, depth and innovation to defend ourselves in a major confrontation? Is that enough to organize ourselves on a European scale and have the means to fight?”, implying he would not opposed further spending increases (albeit coming during difficult budget negotiations domestically).
CANADA: Modestly Dovish FI Reaction To CPI Pared
- They are still only relatively small moves but 2Y GoC yields have pared most of their dip on the CAD CPI release, now just 0.5bp lower although still -3bp on the day. For context, 2Y Tsy yields are -1bp post-data for also -3bp on the day.
- The further acceleration in the BoC’s core to 3.5% annualized could be at play here, being a second month above the 1-3% target band and technically its highest since Sep 2023.
- It is however a volatile series, whilst the smoother six-month run rate increased a steadier 0.1pp back to 2.8% Y/Y to just about remain within that target band (although still its fastest since Jan 2024).
FOREX: Bank Of America Still Await Confirmation Of Broader USD Top
Bank of America write “the USD optically benefited from the sell-off in equities since mid-December. But this risk-off bid is less evident "under the hood" and likely driven more by the emergence of tariff risk premium, which affects both markets. This is evident in the gap between the DXY and the level implied by rate differentials, even after the Inauguration Day sell-off.”
- Looking ahead, they believe that “some risk premium is likely to sustain as there remains uncertainty around the timing of tariff increases.”
- Ultimately, they believe that “the bigger near-term risk for USD bulls is the proximity to CTA stop-loss levels. Tariff noise and CTA unwinds aside, a deceleration in U.S. services vs. manufacturing, of which there is little sign yet, remains a precondition for peak USD.”
