EU CONSUMER STAPLES: Tesco: Q3 results firm as expected, FY guidance left unch
(TSCOLN; Baa3 S/BBB- Pos/BBB- S) (Equities -2.6%)
It's reporting Q3 (3-months to 23rd Nov) + x-mas period sales. Core business, UK & Ireland grocery, was +3.1% on volume growth. Wholesale Booker continues declines (-1.3%), dragged on by falls in Tobacco (was -7% in 1H). Small Central Europe exposure was +3.5%.
Guidance for FY (12m to Feb) is left unch at £2.9b in EBIT, +5%yoy (remaining Tesco bank operations will add +£0.12b). FCF guidance unch for between £1.4-£1.8b (prev. year £2b).
Tesco as at December held a 28.1% market share in the UK, well in front of no. 2 at 16%. Comments around BS last year were a governance green flag - leverage gross/net 2.8/2.1x is holding below stated net 2.3-2.8x target. No firm view here, €31s were value screen starting in May last year and have tightened -20bps against Carrefour.
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Historical bullets
SILVER TECHS: Corrective Bounce Extends
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $32.283 - High Dec 9
- PRICE: 31.734 @ 08:10 GMT Dec 10
- SUP 1: $29.642 - Low Nov 28
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
Silver is holding on to its recent gains. Despite a recovery in price, the bear cycle that started Oct 23 remains in play and gains are considered corrective - for now. Price has recently traded through a trendline drawn from the Aug 8 low. A resumption of the bear leg would open $28.446, a Fibonacci retracement. The 50-day EMA, at $31.154, has been pierced. A continuation higher would expose $33.125, the Nov 1 high.
CROSS ASSET: Bund and Treasuries are falling lower, Yen fades
- Bund is making another attempt at the initial support noted at 135.93, breaking through now on very little size in terms of Volumes.
- Bund and Tnotes care still mostly trading in tandem, now seen for the past 4 sessions, spread is jusft 0.7bp tighter in early trade.
- As noted on the open, next Technical support in Futures would be seen at 135.41 (20 day EMA), but before that, the very short term 23.6% retrace of the November fall in 10yr Yield is at 2.14%, equates to right here at 135.80.
- USDJPY is through the intraday high following the push lower in Treasuries, now testing the next immediate resistance at t 151.70 20-day EMA.
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4346 2.0% 10-dma envelope
- RES 3: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4196 1.764 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4190 Intraday high
- PRICE: 1.4185 @ 08:01 GMT Dec 10
- SUP 1: 1.4012/3928 20-day EMA / Low Nov 25 and a key support
- SUP 2: 1.3902 50-day EMA
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend condition in USDCAD remains bullish and today’s gains have reinforced this theme. The pair has pierced resistance at 1.4178, the Nov 26 high, to highlight a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Sights are on 1.4196 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support lies at 1.4027, the 20-day EMA.
