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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CONSUMER STAPLES
28s cheap view taken off as 1) secondary moves wider taking NIC away and 2) half-yearly event risk approaches.
3yr basis is cheap view added.
- Elo lines are +5-17bps and among the worst performers in HY consumer. We continue to see it as nerves heading into ~expected rough 1H results; broader French sentiment may be exacerbating that. Vol is not new for this name.
- The good for Elo starts and ends with levels; we've plotted where HY names in consumer have recently priced. Only Upfield, a €3b margarine/spreads co with declining volume and net 6.5x leverage, came wide of it. As we've said basis (Xover member) is plenty negative as well for Elo.
- Moves have traded away the very cheap technicals the new 28s came with 2-months ago including a 57bp NIC (now 0) and 50bps of roll-down into 9-month shorter 27s (now 28bps).
- It's still benefited us by giving protection from the much harsher sell-off on lines around it (see below); but that protection is now gone and with key 6-monthly event risk (i.e. earnings) less than 1m away, we take off the cheap view.
- We've roll it forward and into a cheap basis view on the 3Y that is at -103bps: CDS is at +205 vs. 27s at Z+308 (eqv. 6.1%/B+350).
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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