Halister News

(Bloomberg) -- European Parliament’s Economic and Monetary Affairs Committee and the Committee on Civil Liberties, Justice and Home Affairs rejected a blacklist of countries with possible links to money laundering and financing of terrorism, which has been drawn up by the EU Commission, according to an e-mailed statement on Thursday.

• MEPs of the committees believe blacklist is too restrictive, voted for resolution to send it back to the Commission for revision
  • Lawmakers said draft list fails to include jurisdictions which may be involved in tax crimes
• Resolution will be put to a full plenary vote in Jan. and Parliament must now decide either to support or reject the motion

(Bloomberg) -- Stepening in German 5/30s curve fades in its initial test near 163-167bps, comprising the steepest points seen in 2015, Bloomberg technical analyst Sejul Gokal writes.

• See chart here; spread at 150bps vs 161bps wide
• German 5s30s widens by as much as 24bp -- after Draghi said ECB purchases can include assets yielding below the depo rate floor, a category that includes most of the euro-zone curve maturing within 5 years.

• 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

(Bloomberg) -- Combination of QE extension and tapering signals a “longer but slower” trajectory for ECB and indicates the bank won’t raise rates before 2019, Evercore ISI’s Krishna Guha writes in note.

• New forward guidance pushing back hikes that got “pulled in” after Trump election win and keeping front end of bund curve down
• Nine-month extension of QE “puts the ECB on autopilot” through all European elections in 2017
• Evercore expects ECB to stick with the same national allocation of QE budget but buy few bunds at front end when yields are low
  • Will instead buy bunds later with higher yields to “maintain long-run fidelity to capital key”

--FERGAL O'BRIEN

--FERGAL O'BRIEN