HALISTER1: U.S. ECO PREVIEW: New Home Sales, UMich Due in 5 Minutes

U.S. ECO PREVIEW: New Home Sales, UMich Due in 5 Minutes

(Bloomberg) -- Sales of new single-family homes seen at 590k annual rate in Oct. vs 593k in Sept. (forecast range 550k to 616k); new home sales account for ~10% of residential market; tabulated when contracts signed.
  • Oct. could be constrained by lack of inventory; number of homes for sale well below average for past several decades: Bloomberg Intelligence
  • University of Michigan consumer sentiment index seen at 91.6 in final Nov. report, same as preliminary (forecast range 88.3 to 95); based on random sample of households
  • Oct. index was 87.2
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
8810Z US (University of Michigan)

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UUID: 7947283

HALISTER1: Easing ECB Lending May Improve Liquidity, Not Repo: Rabobank

Easing ECB Lending May Improve Liquidity, Not Repo: Rabobank

(Bloomberg) -- Any changes to the ECB’s securities lending facility may be more likely to improve bond market liquidity than shortages in the repo market unless there are adjustments to the collateral rules.
  • ECB facilitating bond lending “gives primary dealers more confidence in taking a short position in the market so others can more easily take short positions,” says Rabobank strategist Lyn Graham-Taylor
    • “In theory liquidity should improve”
  • Currently the ECB lends securities at a fixed fee of 30bps, or the market rate, whichever is higher
    • Subject to availability, each counterparty may borrow up to 2.5% of the amount outstanding of a single issue, with a maximum of EU200m for any such issue
    • These are the two current parameters which could be relaxed; bund futures dropped sharply on reports that the ECB would lend out more bonds to avert market freeze
  • While the initial reaction may be on the margin negative to bunds, as support from repo is reduced, this does not constitute a material policy change, Graham-Taylor says
    • ECB’s current securities facility is a bond-for-bond transaction so unless “they open up collateral, it wouldn’t change anything” in the repo market
    • Other impediment is each national central bank controls its own securities lending facility so “the Bundesbank can ultimately decide not to change anything”
    • “Whether they accept any other assets, or cash, changes the game”
    • NOTE: Euro-area repo rates trading below ECB’s -40bp deposit rate, as well as Eonia
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)
RABO NA (Cooperatieve Rabobank UA)

People
Lyn Graham-Taylor (Rabobank International)

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UUID: 7947283

(2) *U.S. EPA SAID TO INCREASE 2017 QUOTAS FOR CORN-BASED ETHANOL

*U.S. EPA SAID TO INCREASE 2017 QUOTAS FOR CORN-BASED ETHANOL

Alerts: HALISTER, HALISTER1
Source: BN (Bloomberg News)

Tickers
GPRE US (Green Plains Inc)
TSO US (Tesoro Corp)
VLO US (Valero Energy Corp)

Topics
Solvents

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UUID: 7947283

HALISTER1: St. Clair Holding, ULC - DBRS Rating Report

St. Clair Holding, ULC - DBRS Rating Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

People
Adam Provencher (DBRS Inc)
Energy Resources LLC (Energy Resources LLC)
Radi Annab (DBRS Inc)

Topics
Fixed Income Research
Credit Analysis Research
Credit Research
Investment Research

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UUID: 7947283