Halister News

Economic Release Details: {NOBRDEPA Index ECOD} --STEPHEN TRELOAR

(Bloomberg) -- The likelihood of an Italian referendum on labor-market reform approved by Renzi government is negative news as it puts at risk one of the most important bills the nation approved over the past few years, Fabio Fois, economist at Barclays, writes in client note.

• It increases the probability of snap elections being held in the 2Q next year
• Government might unravel the Jobs Act reform; still this option would be politically unpalatable as the ruling PD party is unlikely to amend the “poster child” reform of its mandate, especially after the rejection of the Senate reform
• NOTE: Italy Vote Likely in 2Q to Avoid Referendum on Job Reform: HSBC

Economic Release Details: {SZLTSDAB Index ECOD} --JANA RANDOW

(Bloomberg) -- BNP Paribas recommends investing in stocks in India, one of fastest-growing economies in world, Mirza Baig, Singapore-based head of fx and rate strategy for Asia, says in briefing.

• Likes Indonesia bonds and fx as nation offers highest real yield among DM and EM economies; fx to be boosted by rally in commodities
• Brazil fx attractive as “a lot of weakness” has been priced in and bulk of rate cuts have happened
• Recommends short SGD/IDR, EUR/BRL
• Markets likely to see “much more idiosyncratic movements” in specific asset classes as correlations break down
• Sees more USD strength; forecasts USD/JPY at 128 at end-2017, EUR/USD at parity, USD/CNY at 7.40
• Sees higher global yields and steeper curves as Fed raises rates, with 10-year Treasuries at 3% by end-2017, bunds at 0.7% - 0.75%, China bonds around 3.6%, Japanese debt at 0.15%
• While Bank of Japan is seeking to pin the 10-year yield near zero, BNP doesn’t rule out potential rise in target rate