Softer Stance in BOE Rate-Setters Speeches Could Steepen Gilt
Curve
A softer stance about the path of interest rate rises in the
U.K. from Bank of England rate-setters speaking on Thursday could
prompt the gilt yield curve to steepen, says Mizuho. "There's a
strong chance that today's speakers could provide more clarity on
where the consensus of the Monetary Policy Committee really is, and
we'd expect this consensus to favour a more gradual path than is
currently priced," analysts at the bank say. This could be a
catalyst to steepen gilt forwards of intermediate maturities, which
beyond 2 years are now extremely flat, they says, noting that the
segments between 2-year 1-year forwards and four-year 1-year
forwards are now inverted.
Companies News:
UK Antitrust Watchdog Is Investigating Dye & Durham's
Acquisition of TM Group (UK)
The Competition and Markets Authority said Thursday that it is
investigating whether Canadian cloud-based software provider Dye
& Durham Ltd.'s acquisition of TM Group (UK) Ltd. may lead to a
substantial lessening of competition within any U.K. markets.
---
National Express Revenue Continued to Improve in 3Q --
Update
National Express Group PLC said Thursday that revenue has
continued to improve in the third quarter of the year, and it
backed its full-year underlying pretax profit expectations.
---
Rubix Group Holdings to List on London's Main Market
Rubix Group Holdings Ltd. said Thursday that it plans to list on
London's main stock market and expects to raise proceeds of around
850 million euros ($985.6 million) via a placing of new ordinary
shares.
---
Castelnau Exceeds Target Issue in London Float
Castelnau Group Ltd. said Thursday that it has raised gross
proceeds of 53.1 million pounds ($72.5 million) in its float on the
London Stock Exchange, with its market capitalization exceeding its
target issue size.
---
Radiator Company Stelrad Confirms Intention to Float in
London
Stelrad Group PLC, a manufacturer and distributor of steel panel
radiators, on Thursday confirmed its intention to float on the
London Stock Exchange.
---
Purplebricks CFO to Step Down at End of October, Steve Long
Named Successor
Purplebricks Group PLC said Thursday that Chief Financial
Officer Andy Botha will step down from the role and board at the
end of October and that it has named Steve Long as his
successor.
---
Capital & Regional to Restructure Mall Facility; Launches
GBP30 Mln Fundraise
Capital & Regional PLC said Thursday that it has reached an
agreement with lenders to restructure and reduce debt secured over
its four mall assets, including launching a 30 million-pound ($41
million) open offer.
---
Firering Strategic Minerals Expects to Float in London Next
Month
Firering Strategic Minerals PLC said Thursday that it expects to
float on the London Stock Exchange in early November and use the
money to acquire pilot production plants and fund exploration.
---
Quilter Chairman Glyn Jones to Retire Next Year
Quilter PLC said on Thursday that Glyn Jones will retire from
his role as chairman and director in 2022 once a successor is in
place.
---
Marshall Motor Buys Car Dealer Motorline for GBP64.5 Mln -- Deal
Digest
ACQUIRER: Marshall Motor Holdings PLC
---
Kistos Appoints Peter Mann as CEO, Richard Slape as CFO
Kistos PLC said Thursday that it has appointed Peter Mann as
chief executive officer and Richard Slape as chief financial
officer.
---
XPS Pensions Says FY 2022 Performance Remains in Line With
Expectations
XPS Pensions Group PLC said Thursday that its performance for
the year ending in March 2022 remains in line with expectations,
and it guided for higher single-digit revenue growth in the
period.
---
Sabre Insurance Expects 2021 Pretax Profit to Miss Market
Views
Sabre Insurance Group PLC said Thursday that it expects pretax
profit for 2021 to miss market expectations, but that it is
confident in its outlook.
---
Norcros 1H Revenue Rose; Raises Full-year Profit Views
Norcros PLC said Thursday that it delivered a high level of
profitability in the first half of fiscal 2022, and raised its
full-year operating profit expectations.
Market Talk:
Gilt Traders to Focus on BOE Officials' Speeches
0906 GMT - Gilt traders will pay special attention to speeches
by Bank of England rate-setters Silvana Tenreyro and Catherine Mann
scheduled later on Thursday. "Today's speeches from BoE's Tenreyro
and Mann will be key for the development of the sterling front-end
[of the yield curve] and in turn for longer maturities," Mizuho
analysts say. They expect both Monetary Policy Committee members to
oppose "what's been priced in lately, and show an aversion to
voting for hikes in 2021," which would signal the MPC consensus
favors a more gradual path of interest rate rises than what it is
currently priced.
---
Hays 1H Fee Growth Was Better Than Expected
0842 GMT - U.K. staffing company Hays's like-for-like fee growth
of 41% for the first quarter of the fiscal year was ahead of
consensus expectations of 36%, RBC Capital Markets says. There was
better-than-feared growth in Australia and New Zealand at 34%, with
no material negative impacts from current lockdowns which is key
given the excessively strong correlation between Hays's share price
and that of the wider Australian index, RBC says. "We believe that
the available survey data and anecdotal evidence from the
specialist staffers themselves pertaining to both employer and
candidate confidence point to a solid base from which fees and,
moreover, profitability can grow," the bank says.
---
Demand from Pension Funds, Life Insurers Boosts Longer-Dated
Gilts
0836 GMT - Steep demand for longer-dated U.K. sovereign bonds
from pension funds and life insurance companies boosted the price
of those bonds, driving yields lower. The yield on the 30-year gilt
closed Thursday at a two-week low of 1.327%, according to Tradeweb.
Mizuho analysts say that markets saw a significant amount of demand
for longer-dated debt from life insurance companies and pension
funds, particularly in the gilt market. "30Y gilt yields traded
around 10.5bp lower on the day, driving a very sharp curve
flattening, they say. Pension funds and insurance companies usually
invest in long-dated assets to match their long-term
obligations.
---
Pound's Gains Seen Held Back by UK Supply Chain Issues,
Inflation Fears
0745 GMT - Sterling's gains on speculation about an imminent
U.K. interest-rate rise are expected to be limited, reflecting
concerns about the nation's particularly severe supply chain
issues, labor shortages and high inflation, Commerzbank says. Many
of the supply shortages that the world is experiencing reflect
pent-up demand in the wake of coronavirus so are expected to be
temporary but this view doesn't apply to the U.K. due to Brexit,
Commerzbank's Ulrich Leuchtmann says. The U.K. also faces further
political and economic risks from its stubborn position in
post-Brexit negotiations, he says. "Those make a stronger sterling
impossible, despite rapid Bank of England rate hikes." GBP/USD
rises 0.3% to a two-week high of 1.3700, according to FactSet.
EUR/GBP falls 0.2% to 0.8473.
---
Johnson Matthey Stock Is Seen Underperforming Due to Weak
Automotive-Catalyst Business
0614 GMT - Shares in Johnson Matthey will continue to
underperform as its automotive-catalyst business remains weak, with
earnings growth from battery cathode materials and hydrogen failing
to compensate, Jefferies says. Shortages have pushed back the
automotive-catalyst unit's recovery, likely to 2022-2023, giving
the FTSE 100-listed chemical and sustainable technologies company
one to two years of earnings momentum in an internal combustion
engine business which accounts for around 60% of sales, Jefferies
says. "Our concern surrounds a weaker overall recovery and loss of
another year of earnings [and cash flow] generation from a business
in ultimate decline," the bank says. Jefferies cuts its rating on
the stock to underperform from buy, and lowers the target price to
2,300 pence from 4,200 pence.
Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka
Halas at sarka.halas@wsj.com
(END) Dow Jones Newswires
October 14, 2021 06:15 ET (10:15 GMT)
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