HALISTER1: BTP-Bund Completed Bear Flag Pattern Amplifies Compression Risks

BTP-Bund Completed Bear Flag Pattern Amplifies Compression Risks

(Bloomberg) -- Italy-Germany 10y yield spread may embark of a fresh narrowing phase toward 143bps-144bps after resolving a continuation pattern on a daily time frame, Bloomberg technical analyst Sejul Gokal writes.
  • See chart; spread now +2bps at 155bps
  • BTP-bund spread validated a bearish ‘flag’ pattern yesterday, which ends the corrective widening move since mid-December and argues for a continuation of the compression trend started late November
  • Support at 148bps (100-DMA) and 144bps-143bps ahead of double-Fibonacci support; below here introduces 139bps (200- DMA)
  • Back-to-back close above upper end of gap window at 159bps could damp the narrowing momentum, with a move above 170bps required to fully nullify the compression pressure
  • NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: UST-Gold Correlation Hits Record; 76.4% Fibonacci Levels Intact

UST-Gold Correlation Hits Record; 76.4% Fibonacci Levels Intact

(Bloomberg) -- U.S. 10-year Treasury yields and spot gold have seen their 30-week rolling inverse correlation hit a record at -0.98, Bloomberg technical analyst Sejul Gokal writes.
  • See LIVE chart
  • Following the breakout moves in the aftermath of U.S. elections, both have recently defended their long-term 76.4% Fibonacci levels at 2.64% and 1,124 respectively (see here)
  • Correlation analysis:
    • 6-month r-squared at +0.93 vs +0.36 seen in previous 6- month study period (01/2016-06/2016); standard error of beta has gone down by almost 10x vs level exhibited in first half of 2016
  • NOTE: Sejul Gokal is an technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER: UniCredit May Skip Risky-Bond Coupons If Fundraising Fails (1)

UniCredit May Skip Risky-Bond Coupons If Fundraising Fails (1)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
UCG IM (UniCredit SpA)
BMPS IM (Banca Monte dei Paschi di Siena SpA)
PEO PW (Bank Pekao SA)

People
Jean Pierre Mustier (UniCredit SpA)
Roger Francis (Mizuho Financial Group Inc)

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UUID: 7947283

HALISTER1: Indian Bonds, Rupee to Outperform EM Asia in 2017, BofAML Says

Indian Bonds, Rupee to Outperform EM Asia in 2017, BofAML Says

(Bloomberg) -- Continuation of monetary policy easing, strong local demand for bonds and external buffers to help Indian assets, Bank of America Merrill Lynch strategists Adarsh Sinha and Rohit Garg write in Jan. 11 report.
  • Low sensitivity to USD, CNY and USD rates also significantly improves the outlook of local assets against a backdrop of higher USD rates, stronger USD and weaker CNY: BofAML
  • Recommends receiving 5-year India swaps vs Singapore swaps and flatteners in India 1-year 1-year vs 5-year NDOIS
  • Lowers benchmark 10-year yield est. to 6.20% by end-March from 6.60% earlier; sees yield at 6.50% by end-December vs 6.80% earlier
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Rohit Garg (Merrill Lynch & Co Inc)
Adarsh Sinha (Merrill Lynch Asia Pacific Ltd)

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UUID: 7947283