HALISTER1: India Rates ’Unattractive’, Long-End Yields to Rise, SocGen Says

India Rates ’Unattractive’, Long-End Yields to Rise, SocGen Says

(Bloomberg) -- India’s rates are likely to rise in 2017 on narrower spread between local govt bonds and U.S. Treasuries, and reduced foreign appetite for local currency bonds as policy easing is on its last legs, strategists including Frances Cheung write in note.
  • Short-end of curve may have some downside left on monetary easing, though market has priced in more than one RBI rate cut by end-2017
  • Investors should look for opportunity in steepeners and pay rates at long end of NDOIS and OIS curves
    • Trade will benefit from normalization of the yield curve amid higher Treasury yields and oil prices
  • Reduced foreign demand for local debt will add to negative sentiment; bond-OIS spread should widen this year
  • Forecasts 10-year yield at 6.3% by March, 6.7% by end-2017
  • Yield on 10-year govt bond currently up 3bps to 6.48%; fell 125bps in 2016
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Frances Cheung (Societe Generale SA)

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HALISTER1: INDIA RATINGS: Super Smelters Cut; RGA Infrastructure Raised

INDIA RATINGS: Super Smelters Cut; RGA Infrastructure Raised

(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
DOWNGRADE
  • Super Smelters
    • Long-term bank facilities cut to BB from BBB- at Crisil
    • Expects liquidity to be constrained by inadequate cash accrual to meet large debt obligation
UPGRADE
  • RGA Infrastructure
    • Term loan raised to BBB(SO) from BBB-(SO) at ICRA
    • Cites strength of corporate guarantee provided by RGA Software Systems
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
9166803Z IN (Super Smelters Ltd)

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HALISTER1: INSIDE INDIA: Bonds Fall; 10-Year Yield Floor at 6%: JPMorgan

INSIDE INDIA: Bonds Fall; 10-Year Yield Floor at 6%: JPMorgan

(Bloomberg) -- Yield on 10-year notes headed toward highest close in almost three weeks
  • Local bonds are reacting to surge in U.S. yields overnight, says Ajay Manglunia, head of fixed-income markets at Edelweiss Financial; no negative news domestically to drive bearish sentiment, he says
    • Markets looking forward to Feb. 1 budget and fiscal deficit target for FY18: Manglunia
  • Bond market doesn’t seem as fixated on fiscal deficit target this year, may be relatively forgiving for ‘small but not material’ breach, says Brijen Puri, head of markets at Indian unit of JPMorgan Chase
    • Difficult for 10-year govt bond yield to drop below 6%-6.25% given base case of 25bps rate cut
  • Yield on govt bond due September 2026 up 2bps to 6.47%; close at that level will be highest since Dec. 30
  • NOTE: U.S. 10-year bond yield rose 10 bps Wednesday
  • INR falls 0.2% to 68.22/USD, set to drop for second day
  • Read: JPMorgan calls for weaker Indian rupee to keep pace with China
  • Public banks were the biggest buyers of govt debt Wednesday, with net purchases of 50.3b rupees: CCIL data; foreign banks were biggest sellers at 42.6b rupees
  • Foreign investor holdings of rupee-denominated notes fell by 1.8b rupees Wednesday: NSDL data
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ajay Manglunia (Edelweiss Financial Services Ltd)
Brijen Puri (JPMorgan Chase Bank NA)

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HALISTER1: Australia December Employment Change Due in 5 Mins; Est. 10.0K

Australia December Employment Change Due in 5 Mins; Est. 10.0K

(Bloomberg) -- Australia will release December jobs data at 11.30am local time.
  • December employment change est. 10.0K vs prev. 39.1K
  • December unemployment rate est. 5.7% vs prev. 5.7%
  • December participation rate est. 64.6% vs prev. 64.6%
  • NOTE: November full time employment change was 39.3K while part-time employment change was -0.2K
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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