CAPITAL GOODS: Sandvik (SANDSS NR/BBB+/NR): 1Q25 Results

The OECD has revised its 2025 and 2026 world GDP forecasts down to 3.1% (vs 3.3% in December) and 3.0% (vs 3.3% in December) respectively in its March Interim Economic Outlook Report. The group notes that higher trade barriers in several G20 economies and increased policy uncertainty will weigh on investment and household spending, pulling growth lower.

• The forecasts “are based on an assumption that bilateral tariffs between Canada and the United States and between Mexico and the United States are raised by an additional 25 percentage points on almost all merchandise imports from April”.
• As such, Canada and Mexico have seen the largest growth downgrade in 2025 and 2026: Canada 0.7% in 2025 (vs 2.0% in December) and Mexico -1.3% in 2025 (vs 1.2% in December).
• US growth was revised down to 2.2% in 2025 (vs 2.4% in December) and 1.6% in 2026 (vs  2.1% in December).
• Euro Area growth was revised down three tenths in both 2025 and 2026 to 1.0% and 1.2% respectively, with Germany seeing the largest downward revision in 2025 and Italy in 2026.
• See the full report here.

The latest CFTC CoT report saw asset managers trim their overall net DV01 equivalent exposure by over $8mln. They reduced longs further out the curve (UXY, US & WN), although that was partially offset by an uptick in longs through the short end and intermediates (TU, FV & TY). The cohort remains net long across all contracts.

• Hedge fund positioning had a modest bias towards an extension of their net short position, with the DV01 equivalent move in that direction (across TU, TY, US & WN) outweighing pockets of short cover (FV & UXY). The cohort remains net short across all contracts.
• Broader non-commercial net positioning saw net shorts added to in most cases, with only short cover in UXY futures breaking that trend. The cohort remains net short across all contracts.

Source: MNI - Market News/CFTC/Bloomberg

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