HALISTER1: CORRECT: BOE’s Forbes Due to Speak in London on Wednesday

CORRECT: BOE’s Forbes Due to Speak in London on Wednesday

(Bloomberg) -- (Corrects day in headline.)
  • London: Bank of England policy maker Kristin Forbes speaks at a JPMorgan Cazenove conference.
  • Text to be released on BOE website
  • NOTE: Forbes opposed QE at BOE’s Nov. 3 decision, but didn’t vote against it; see recent BOE policy comments and decisions here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kristin Forbes (Bank of England)

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HALISTER1: BOE’s Forbes Due to Speak in London in 5 Minutes

BOE’s Forbes Due to Speak in London in 5 Minutes

(Bloomberg) -- London: Bank of England policy maker Kristin Forbes speaks at a JPMorgan Cazenove conference.
  • Text to be released on BOE website
  • NOTE: Forbes opposed QE at BOE’s Nov. 3 decision, but didn’t vote against it; see recent BOE policy comments and decisions here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Kristin Forbes (Bank of England)

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HALISTER1: Deutsche, Goldman, Peers Deal With Sanctions and Bribery Probes

Deutsche, Goldman, Peers Deal With Sanctions and Bribery Probes

Alert: HALISTER1
Source: BI (Bloomberg Intelligence)

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C US (Citigroup Inc)
CSGN VX (Credit Suisse Group AG)
DBK GR (Deutsche Bank AG)
GLE FP (Societe Generale SA)
STAN LN (Standard Chartered PLC)

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BI Analysis

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HALISTER1: GBP Real Rates May Extend Rise Given Rich RPI Forwards: Analysis

GBP Real Rates May Extend Rise Given Rich RPI Forwards: Analysis

(Bloomberg) -- The bounce in U.K. 5Y real rates may have more room to run because the currency pass-through to inflation typically isn’t sustained in the longer term, Bloomberg strategist Tanvir Sandhu writes.
  • FX weakness should hence have less impact on 5Y compared with front-end; even the GBP TWI collapse of 25% in 2008 (vs 14% this year) boosted inflation above target only during 2009–13
  • U.K. 5Y inflation-indexed bond yield has now risen to -222bp from a 3 1/2-year low of -258bp on Oct. 11; in April 2013, the rate hit an all-time closing low of -263bp
  • GBP RPI 5s10s spread has narrowed to almost zero, which is rare, indicating 5y has overshot vs longer end; see chart here
  • GBP Sonia 5y1y at 1.28% is inconsistent with the RPI swap curve, which is flat across the 3-10Y sector at about 3.5%
    • Real policy rates should move higher as the richness in inflation forwards may fade as they seem to have overpriced the FX impact
  • See live chart here of U.K. 5Y real rate vs GBP TWI and the pricing of lagged pass-through to come; real rates may be supported given the lagged currency boost to inflation is to pass and with BOE staying averse to negative rates
  • Issuance risks are rising for the long end of nominal curve given likely weaker growth forecasts due to Brexit; however, a deterioration in growth may eventually outweigh
  • BOE official Kristin Forbes’ 2015 paper had concluded that exchange-rate pass-through is relatively large in response to domestic monetary policy shocks, but smaller in response to domestic demand shocks
  • NOTE: Front-end GBP inflation markets underpinned by import tariff risks and Brexit-induced supply-side weakness; will require a rally in sterling, collapse in oil prices and/or rise in inflation bond supply to adjust significantly lower again; see more here
  • NOTE: Tanvir Sandhu is an interest-rate and derivatives 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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Kristin Forbes (Bank of England)

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HALISTER1: STC Stake Increase in Turk Telekom Owner Possible, HSBC Says

STC Stake Increase in Turk Telekom Owner Possible, HSBC Says

(Bloomberg) -- “We see current ownership of Oger Telecom Ltd. remaining, with possible rescheduling of the financing of Ojer Telekomunikasyon AS/Oger Telecom Ltd.’s debt,” HSBC analysts including Herve Drouet, Eric Chang, Adam Fox-Rumley say in e-mailed report.
  • “An increase of Saudi Telecom Co.’s stake in Oger Telecom Ltd. is nevertheless possible, should refinancing be problematic and a capital increase required at the OTL level”
  • NOTE: Ojer Telekomunikasyon, or OTAS, an SPV that owns 55% of Turk Telekom, missed an installment in September on a $4.75b loan from 29 international banks; Otas is owned by Oger Telecom, in which Saudi Oger has 65% and STC 35% stakes
  • NOTE: Hariris Said in Sale Talks to Avoid Default on Turkey Loan
  • “We have assumed that if any acquisition of the controlling stake of TTKOM 55% stake is more likely to happen at the holding level (Oger Telecom or OTAS) than via a direct stake sale by OTAS to a strategic shareholder as it would avoid a mandatory minority offering”
  • Lira “under considerable selling pressure and with its larger portion of debt in euro and USD, Turk Telekom is likely to be the most negatively impacted in Q4, which could even affect its 2016 dividend”
  • Turk Telekom will cut its dividend in 2016 due to FX loss, based on forecast of “large non-cash forex loss of 580m liras in 4Q 2016”; dividend may be cut to 0.21 lira/share this year from 0.24 in 2015
  • HSBC cuts Turk Telekom to hold from buy; PT cut to 6.5 liras from 7.2
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
TTKOM TI (Turk Telekomunikasyon AS)
827647Z UH (Oger Telecom Ltd)
316431Z AB (Saudi Oger Ltd)
STC AB (Saudi Telecom Co)

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Adam Fox-Rumley (HSBC Securities Inc)
Eric Chang (HSBC Holdings PLC)
Herve Drouet (HSBC Securities Asia Ltd)

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HALISTER1: Rizal Bank Confident Complaints Vs. Officials Will Be Dismissed

Rizal Bank Confident Complaints Vs. Officials Will Be Dismissed

(Bloomberg) -- Rizal Commercial Banking has yet to receive complaint of Anti-Money Laundering Council related to $81m Bangladesh heist, believes no head office official involved in transaction, Philippine lender says in statement.
  • “We welcome the charges as an opportunity to conclusively prove that our executives acted properly and had no knowledge or participation in any money laundering,” RCBC President Gil Buenaventura says
  • NOTE: Lawyer Says FBI Immunity Offer Rejected in $81 Million Heist Link
  • NOTE: Bangladesh Bank to Pursue Forfeiture of $35m More Heist Money Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
RCB PM (Rizal Commercial Banking Corp)

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Gil Buenaventura (Rizal Commercial Banking Corp)

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HALISTER1: EGB Flows Show France Led Core Buying Last Week: Citigroup

EGB Flows Show France Led Core Buying Last Week: Citigroup

(Bloomberg) -- Net buying of core EGBs for an eighth consecutive week was led by France last week, Citigroup strategist Aman Bansal writes in client note.
  • France saw the ninth week of positive demand
  • Demand for non-core was largely flat overall, but Italy is seeing dip buying
  • Euro linkers saw small net buying last week, led by Italy and France
  • Germany saw net selling last week after five weeks of net buying
  • Linker gilts saw net selling for a second consecutive week, taking the 4-week average to its lowest level in a year
    • Net selling was concentrated in the 30y+ sector following the IL56 syndication announcement
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Aman Bansal (Citigroup Inc)

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