Halister News

(Bloomberg) -- (Corrects lead to say curve steepening.) UST 2s10s spread widens to levels not seen since February as curve steepening gathers momentum; spread breaks tightening trendline in place since January 2014, Bloomberg technical analyst Sejul Gokal writes.

• See live chart; UST 2s10s now +8bps to 108bps
• Move exposes 119bps hurdle, the 23.6% Fibonacci of 2014-2016 spread narrowing phase
• Next resistance at 123-126bps (which includes the 100-wk MA) and then 138bps
• Investors assess what a Trump presidency will mean for U.S. fiscal and monetary policy
  • Trump pledged to cut taxes and outlay as much as $500b on infrastructure, both policies that could widen the budget deficit and stoke inflation: MORE

• 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) -- UST 2s10s spread widens to levels not seen since February as curve flattening gathers momentum; spread breaks tightening trendline in place since January 2014, Bloomberg technical analyst Sejul Gokal writes.

• See live chart; UST 2s10s now +8bps to 108bps
• Move exposes 119bps hurdle, the 23.6% Fibonacci of 2014-2016 spread narrowing phase
• Next resistance at 123-126bps (which includes the 100-wk MA) and then 138bps
• Investors assess what a Trump presidency will mean for U.S. fiscal and monetary policy
  • Trump pledged to cut taxes and outlay as much as $500b on infrastructure, both policies that could widen the budget deficit and stoke inflation: MORE

• 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) -- Viacom said Media Networks revenues declined 11% to $2.48b, resulting from declines in affiliate and advertising revenues that were partially offset by higher ancillary revenues.

• 4Q adj. EPS 69c, est. 65c
• 4Q rev. $3.23b, est. $3.29b
• 4Q media networks rev. $2.48b, est. $2.48b (Bloomberg News)
  • 4Q Filmed Entertainment rev. $774m, est. $721.8m
• 4Q media networks oper income $750m, est. $723.3m (Bloomberg News, average of 3)
  • 4Q Filmed Entertainment oper loss $137m, est. loss $153.7m
• 4Q domestic advertising rev. change -8.00%
• 4Q international ad rev. change +6.00%

Statement NOTE:

• Preview
  • Bloomberg Intelligence Preview
• Nov. 7, CBS Said to Hire Moelis, Goldman for Possible Viacom Merger: WSJ
  • Nov. 4, CBS CEO Opens Door to Viacom Deal, Says Talks at Early Stage
• Nov. 3, Viacom Said to Buy Telefonica’s Telefe in $400 Million Deal
• Sept. 21, Viacom Cuts Div by 50%.; Plans to Raise Debt Capital
• 16 buys, 21 holds, 1 sell before today
• Call 8:30am (NY time), 888-219-1412

(Bloomberg) -- Dec. 2016 bund futures contracts may extend losses to 161.53-37 support zone after Trump-led spike fades at double-Fibonacci area at 163.28-33, Bloomberg technical analyst Sejul Gokal writes.

• See chart
• Closes overnight gap at 161.77 -- yesterday’s close -- before bouncing on ECB comments
• Interim support at 161.69, the low on Nov. 8
  • Intraday resistance at 162.46 and 162.63-66
• Bund futures now +32 ticks to 162.24
• NOTE: USD long-end rates turn focus to potential for fiscal stimulus: More

• 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) -- Viacom 4Q rev. $3.23b, est. $3.29b

• 4Q media networks rev. $2.48b, est. $2.48b (Bloomberg News)
  • 4Q Filmed Entertainment rev. $774m, est. $721.8m
• 4Q media networks oper income $750m, est. $723.3m (Bloomberg News, average of 3)
  • 4Q Filmed Entertainment oper loss $137m, est. loss $153.7m

Statement

• 16 buys, 21 holds, 1 sell before today
• Call 8:30am (NY time), 888-219-1412

(Bloomberg) -- Enter 10s30s bund steepeners which will benefit from both the steepening pressure from the U.S. curve and the expected change in the ECB’s stance next month, BNP Paribas strategists write in client note.

• Cash curve is a better trade than the swap curve given the high scarcity on the 30y bund ASW which is likely to be repriced after the December ECB
• Enter half now and then on any setback to 58bp with a 78/80bp target, stop loss at 54bp, 6-month C+R profit around 10.5bp

(Bloomberg) -- Brazil assets may open lower amid a global rout after surprising Trump win in U.S. elections, creating a buy opportunity for investors, Olavo Souza, FI trader at Mirae Asset Wealth Management, says in a phone interview.

• Trump’s first speech after election was “pleasant, conciliatory”; should he keeps this tone, the “end of the world” scenario for markets will not prevail
  • “The markets now depend on Trump’s discourse,” Souza says
  • If he resumes the campaign tone markets may worsen
  • Volatility to remain high until the new government plans are clear
• BRL to drop at the open; in the coming days, USD may reach ~3.35/BRL, the area of the September high
  • Reaction to Trump may overshadow local news, such as Petrobras cutting fuel prices, which could also affect shares and DI rates

(Bloomberg) -- Risk off reaction of European credit markets to U.S. election has been of far smaller magnitude than market reaction to Brexit vote; now stabilizing around the wides as focus turns to likely composition, strategy of Trump administration.

• iTraxx Main currently 76.40 (+3.3bps, +4.5%); off earlier wide of 78.25
  • Widened 18bps (+24.8%) in wake of U.K. vote to leave EU
• iTraxx Xover quoted 341.02 (+15.5bps, +4.75%, earlier wide 346.93); index widened +24.4% in wake of Brexit vote
• EUR IG corporate bond index currently priced at 64.4bps OAS (+2.2bps); EUR HY index 347.0bps (+7.8bps)

--PAUL DOBSON