HALISTER1: Chile’s Short-Term Bonds a Buy to BCI on Outlook for Rate Cuts

Chile’s Short-Term Bonds a Buy to BCI on Outlook for Rate Cuts

(Bloomberg) -- BCI says that economic fundamentals still support cuts in interest rates even after volatility in foreign and local markets, according to note.
  • BCI expects central bank to cut monetary policy rate twice by 25bps in 1Q17
  • BCI’s fair values for policy rate are below current curve
    • Fair value for 3-months at 3.33%; 6-months at 3.2%, 9- months at 3.15% and 12 months at 3.1%: BCI
  • Recommendations for swaps:
    • Increase exposure to peso swaps with duration under 2 years
    • Also recommends positions in CPI-linked UF swaps throughout the curve
  • Recommendations for bonds:
    • Short term CLP bonds attractive, neutral on long term
    • Short term CPI-linked UF bonds also attractive
  • BCI expects CLP to close at 680/USD in 2016
  • 12-month inflation to end 2016 at 2.9%, then will drop to ~2% by mid 2017 and end year at 2.8%: BCI
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: S&P/Corelogic Home Prices Due in 5 Minutes

U.S. ECO PREVIEW: S&P/Corelogic Home Prices Due in 5 Minutes

(Bloomberg) -- S&P Corelogic Case-Shiller Composite 20-City Home Price Index seen rising 5.2% y/y in Sept. vs +5.13% in Aug. (forecast range +4.65% to +5.5%).
  • “Nationwide housing prices appear to be at fair value relative to rents and real personal income when compared to their long-run averages”: Bloomberg Intelligence
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: 3Q GDP Revision Due in 5 Minutes

U.S. ECO PREVIEW: 3Q GDP Revision Due in 5 Minutes

(Bloomberg) -- Gross domestic product seen at +3% in 3Q revision vs prior +2.9% (forecast range +2.8% to +3.3%); data track value of all goods and services produced in U.S.
  • Today’s report will include initial data on 3Q corporate profits, which have declined in 5 of past 6 quarters
    • “Expanding corporate profits are critical to the health of the private sector. Until the expansion resumes, a pickup in business investment is likely to remain elusive and the prospect for sustained, robust hiring gains will also be in jeopardy": Bloomberg Intelligence
  • Initial 3Q GDP report, issued Oct. 28, showed rising inventories, along with an increase in soybean exports, offset lackluster consumer spending
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: BTP Eyes Bullish Pattern Resolution; Yield May See 1.77%: Charts

BTP Eyes Bullish Pattern Resolution; Yield May See 1.77%: Charts

(Bloomberg) -- Italy 10-year yield attempting to break out lower from a ‘pennant’ like consolidation pattern in place since mid-November; confirmed resolution may see yield slide toward 1.77% Fibonacci level, Bloomberg technical analyst Sejul Gokal writes.
  • See chart; -9bps to 1.98%
  • Lower end of pattern at 1.98%; must see a close below here to inspire further rally in BTPs
  • MACD crossing lower from elevated levels, supporting downside breakout
  • Below 1.77%, may target 1.63%, 50% of August-November selloff
  • BTP Futures Spike After Report on ECB Readiness to Support BTPs
  • 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