Halister News

(Bloomberg) -- Co. has never received investigation notice from the U.S. Treasury’s Financial Crimes Enforcement Network, it says in filing to Hong Kong stock exchange.

• Co. has fully applied an anti-money laundering system to ensure compliance with all applicable U.S. laws and regulations
• Co. makes clarification after media reports
• Co. is seeking legal advice, reserves right to pursue action against “unfounded” report
• Co. to resume trading from 9am Wednesday

Link to Statement:Link

(Bloomberg) -- U.K. Oct. CPI y/y est. 1.1% vs prev 1%.

• U.K. Oct. CPI m/m est. 0.3% vs prev 0.2%
• U.K. Oct. CPI core y/y est. 1.4% vs prev 1.5%

(Bloomberg) -- USD/CNY end-2016 forecast is revised to 6.85 from 6.80 as yuan is still vulnerable to capital outflows, BMI Research, writes in note today.

• Yuan sell-off since October largely consistent with PBOC’s policy goal;
  • PBOC will use foreign exchange reserves to limit volatility and steer CNY weaker gradually, rather than stepping in to strengthen yuan
• Yuan still strong in real effective exchange rate terms;
  • Real interest rate differentials to move against the currency amid China’s economic downturn and rising US bond yields in three to six months
• Sees USD/CNY 7.10 by end-2017; USD/CNY 7.40 by end-2018 as China remains mired in mid-term slowdown as structural weakness aren’t fully addressed
• PBOC to cut 1-year benchmark interest rate by 25bps to 4.10% in 2017, then stay on hold through 2018
  • To keep liquidity ample via open market operation and medium-term lending facility
• Expects continued portfolio outflows driven by downside pressure of real interest rate differential between China and major trade partners under easy monetary condition, yuan depreciation expectation and economic slowdown
• USD/CNY rising for fourth day, up 0.12% to 6.8532

(Bloomberg) -- Global rates remain in focus, even though the absolute impact on corporate bond spreads is muted. Asia credit edged tighter overnight as bond prices found some stability for first time this week, suggesting EUR credit should also adopt a firmer tone at the open, Bloomberg strategist Simon Ballard writes.

• Price volatility seen mostly in more liquid synthetic indexes while cash bonds remain reasonably well underpinned
  • Demand/supply dynamics still buoyant; ECB added EU1.8b to CSPP last week, lowest weekly purchases since Sept 2, but holds cumulative EU42.156b
• Reynolds American has rejected BAT’s $47b bid, although the companies remain in talks. A deal would create world’s largest publicly traded tobacco business, with strong U.S. foothold and leading position in e-cigarettes

• Bloomberg Barclays Eur-Agg Corporate index closed Monday at 115bps (+2bps); Bloomberg Barclays Eur HY index closed at 408bps (+14bps)
• CDX IG closed Monday +1.8bps at 77.76; iTraxx Asia Ex Japan IG is currently -2.3bps at 131.10 and iTraxx Australia quoted -3.4bps at 111.17

NEWS

• Corporate News
• Vodafone 2Q Organic Service Rev. Growth Beats; Narrows Guidance
• Merck KGaA Raises Profit Forecast Aided by Health-Care Unit
• FirstGroup 1H Revenue Rises 5.1%, Sees Good Progress for FY
• EasyJet Full-Year Pretax Profit Beats Estimate
• TalkTalk 1H Sales Fall, In Line With Ests.; Adj. Ebitda Up 44%
• H&M October Sales Rise 10% vs SME Direkt Estimate +9.2%
• Deutsche Wohnen 9M FFO I Rises 32%; Raises 2016 EPRA NAV Outlook
• Telkom 1H Headline EPS Rise 19.7%; Mobile Business Profitable

• Financial News
• EU Bank Supervisors Face Constraints on Setting Capital Charges
• Talanx 3Q Net Income Jumps; Premiums Decline; Raises Outlook
• Japan Banks Warn About Outlook After Profit Beats Estimates
• Sberbank 3Q Net Profit 137b Rubles; Est. 140b Rubles
• Nordic, Dutch Banks Issue Joint Warning to EU Commission
• Aozora Bank 1H Profits Beat Guidance, Analyst Estimates

• Rating News
• S&PGR Revises Australia Post Otlk To Stable; Rtgs Affirmed
• Oman’s Banking System Outlook to Stable From Negative by Moody’s
• Fitch Affirms Ratings on Major Japanese Banks
• S&P Cuts Maersk to BBB From BBB+ Amid Tough Market Conditions
• Samsung Rtgs Unaffected By Harman Acquisition: S&PGR

• Other News
• Mnuchin Said to Be Top Treasury Pick Among Trump’s Advisers
• Bond Selloff Abates as Dollar Snaps Trump Rally; Iron Ore Slides
• Saudi Fund Said to Explore Asset Sales for Overseas Deals

ANALYST VIEWS

• Corporate bond spreads are feeling a little hot under the collar, unable to break away from the weakness besetting government bonds. The big change now is going to be rising debt costs for corporates and for investors - the worry about flows. More specifically, the potential for outflows: creditmarketdaily.com
• Rising rates highlight that the environment of record low funding yields for corporates has an expiry date, and we think issuers are becoming more conscious of windows of opportunity in primary. With high yield names dominating the late stage of the reporting season, the pipeline could soon also extend again for these lower rated buckets: Commerzbank

NEW ISSUES

• AbbVie EU3.6b 3Y, Long 7Y, 12Y Bonds
• BBVA EU1b 10Y Covered MS +23
• FMS Wertmanagement GBP250m 5/2021 UKT +31
• Nordea Mortgage Bank EU1b 7Y Covered MS -8
• European IG credit pipeline here and HY credit pipeline here

• NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.