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(Bloomberg) -- HSBC downgrades Macau gaming stocks as revenue during China’s Golden Week holiday likely fell short of strong expectations, analysts Charlene Liu and Alexis Yan write in note dated Monday.

• Sands China Ltd., Melco International Development Ltd. downgraded to hold from buy, Wynn Macau Ltd. cut to reduce from hold
• Expectations for Golden Week were “too high” and surge in VIP volume didn’t materialize; HSBC’s observations suggest modest to no growth in VIP volume; traffic on soft side, especially mid-week
  • “We did not see an overflowing main casino floor, nor did we see huge crowds at key tourist spots in Macau”
• Disappointing holiday suggests consensus earnings upgrades less likely in near term
• HSBC still has buy rating on Galaxy Entertainment Group Ltd., Melco Resorts & Entertainment Ltd. for undemanding valuations, strong operating trends and good supply pipelines
• NOTE: BI Macau/China Gaming Market Competitive Peers +30% YTD vs HSI +29%
  • Wynn Macau trades at 53x PE, Melco Resorts at 35x, Sands China 29x, Galaxy 26x

To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Will Davies

(Bloomberg) -- The rising chances of Brazil’s GDP growing above 4% are mainly due to the impact of the low real interest rates in the coming quarters, says Fibra in a report signed by Cristiano Oliveira and Ágila Cunha.

• Bank says there are five other main reasons:
  • Continuation of the synchronized growth scenario between developed markets and China;
  • Continued improvement of confidence indexes (industry, services, construction);
  • Higher than anticipated disinflation with direct impact on household disposable income and consequently consumption decisions;
  • Resumption of credit market in an environment where households and businesses have deleveraged strongly;
  • Recalculation of parameters of econometric models that show increased monetary policy effectiveness through traditional channels
• Fibra also raised Brazil’s 2017 GDP estimate from 0.7% to 0.8%

To contact the translator on this story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net To contact the translation editor responsible for this story: Priscilla Murphy at pmurphy134@bloomberg.net Reporter on the original story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net Editor responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net

(Bloomberg) -- In addition to limited near-term supply pressure in Treasuries, the recovery in term premium “could be dampened by two dynamics” -- greater capacity in the banking system to absorb Treasury supply and asset rotation by pension funds, Deutsche Bank strategists led by Stuart Sparks say in Oct. 6 note.

• SLR (Supplementary Leverage Ratio) reform has potential to increase the banking system’s ability to absorb Treasury supply
• More importantly, “pension funds have been presented with a substantial window to ‘harvest’ gains” in equities and reallocate to long-duration fixed income, evident in increase in Treasury Strips
  • Record highs for U.S. equities are driving this, along with rising regulatory cost of unfunded pension liabilities
• “While the term premium remains significantly depressed, given the magnitude of the pension-driven asset rotation, we think de-risking flows will have to subside before the long end is freed to re-steepen”
• Still, with ECB poised to end QE, upward pressure on term premium is likely to steepen 10s30s from historically low levels

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Mark Tannenbaum

(Bloomberg) -- Catalonia’s short-term debt maturing in November, around EU290m, will be a key indicator for the safety of Spanish assets amid a push for independence by regional secessionists, according to UniCredit chief economist Erik Nielsen.

• “The risk of this getting a lot worse, with correspondingly bad market development for Spanish assets, is still too great for my risk appetite,” he writes in note to clients
  • “One indication I’ll be looking for is a firm statement from Madrid that they’ll pay the maturing Catalonian debt when it falls due in November,” as it is not covered by the FLA -- a credit line the central government created to lend money to regions
• “I think Madrid will pay, but I’m nervous about their tough stance more broadly”
• NOTE: Short-term debt value initially flagged by S&P credit rating report Oct. 4, which noted that refinancing would require authorization from the central government

To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma

(Bloomberg) -- The Monetary Authority of Singapore takes “a serious view of the matter and will take firm action against any financial institution or individual that is found to have breached MAS’ requirements relating to anti-money laundering and countering the financing of terrorism", according to emailed statement from MAS spokesperson dated Oct. 9.

• MAS has put in place a robust regime to detect and deter illicit activities in country’s financial sector
  • Financial institutions are required to assess, understand nature and extent of risks posed by customers; verify identities of customers, incl. beneficial owners; inquire about source of funds and/or source of wealth and monitor customers’ transactions as well as perform regular account reviews
• "Singapore will not tolerate the abuse of its financial system as a refuge or conduit for tax-illicit funds": MAS spokesperson
• MAS has not hesitated to take firm action against financial institutions with control deficiencies, and have imposed financial penalties and prohibition orders on culpable individuals where there are serious lapses
• NOTE: StanChart Is Said to Be Probed on $1.4 Billion Client Transfers

To contact the reporters on this story: Serene Cheong in Singapore at scheong20@bloomberg.net; Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net To contact the editors responsible for this story: Stephanie Phang at sphang@bloomberg.net Ron Harui