Halister News

(Bloomberg) -- Relative cheapness, supportive cash flows along with anticipated liability-driven investor interest should ensure good demand at next week’s 07/2057 gilt syndication, RBC strategist Vatsala Datta writes in a client note.

• Ultra-long end of the gilt curve has been cheapening, led by the 40yr sector, going into next week’s 07/2057 syndication
• Estimates size of the deal around GBP4b, which would be equivalent to GBP11.6m/bp DV01 risk and would extend the FTSE All Stocks Index by 0.08y, over 15yr Index by 0.11y, which should generate interest from index-tracking funds
• Fair value of the new issue should be ~1bp over 4% 01/2060s, though with a new issue discount of 1-2bps, expect the new bond to be priced in the range of 2.5-3bps over
• Despite heavy duration flow in the coming two months, there has been strong demand from pension funds and with pension de-risking on the rise, this trend should remain in place
  • Further, cash flow environment is supportive, with GBP2.9b coupons due to private investors on Jan. 23 and GBP17b redemption ahead
• Expect long end to remain under pressure as concession builds, though look for the curve to flatten out of the supply next week, consistent with price action seen over past episodes

(Bloomberg) -- Large value payouts of >500,000 pesos in any single customer or counter parties shall be made only via check payment or direct credit to deposit accounts, Bangko Sentral ng Pilipinas says in statement.

• Money changers, FX dealers allowed to sell currency valued as much as $10,000 per transaction and as much as $50,000 a month per customer
• Money service companies are given six months from date new regulation takes effect to secure central bank registration
• NOTE: Philippines Seeks Tighter Scrutiny, Stiffer Penalty After Bangladesh Heist Link

(Bloomberg) -- Investors running diversified portfolios in the era of the Trump presidency may want to leave room for gold. In this new world, with a real risk of markets being shaken by surprise policy announcements (or errant tweets), a bit of hard asset protection is probably desirable.

• Some analysts will point to the threat of a higher dollar and rising U.S. yields as factors against gold. And that’s certainly been the direction of markets in the weeks since the presidential election. But gold now appears to be diverging from the broad performance of bonds, the dollar and equities.
  • Long-term support for gold is building in the $1,100 area; see chart here
• The argument that gold doesn’t have any yield is also less relevant when two of the biggest currencies on the planet -- the euro and the yen -- have negative short-term interest rates
• With the possibility of financial assets being sent tumbling by a Trump Twitter outburst, gold could be one of the last men standing when the next meltdown occurs
• Witness this week’s dollar sell-off after Trump said the dollar was too strong. It was probably meant as a throw-away line, but it still roiled markets
• Scary geopolitical headlines in the next four years are just as likely to come from Pennsylvania Avenue as they are from Pyongyang
• “Diplomatic conventions exist for a reason,” wrote Paul Donovan at UBS wealth management in a note to clients. Blunt diplomacy could provoke a reaction that unnecessarily increases the cost, he says
  • China is one of several nations with the ability, if provoked, to inflict pain on the U.S. via financial markets
• How to manage gamma risk in a portfolio could be an important skill in the Trump era. Owning a bit of yellow metal might not hurt either
• NOTE: Mark Cranfield is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery

UPGRADE

• Fortpoint Automotive
  • Long-term bank facilities raised to B from B- at Crisil
  • Cites increased cash accruals, enhanced profitability

Economic Release Details: {CNFAYOY Index ECOD} --JEFF KEARNS

Economic Release Details: {CNRSCYOY Index ECOD} --JEFF KEARNS

Economic Release Details: {CNGDPYOY Index ECOD} --JEFF KEARNS