Halister News

(Bloomberg) -- U.K. 3Q GDP growth is expected to drop to to 0.3% q/q from 0.7% in the previous quarter, according to the median estimate in a Bloomberg survey of economists; this is the first GDP report for the months following the June 23 Brexit referendum.

• Forecast range is zero to 0.5% q/q, skewed toward the upside
  • BOE, in its August Inflation Report, said available evidence suggested growth would slow to 0.1% in 3Q
  • In the minutes for the September meeting, the projections were revised to “0.3% in the mature data and for 0.2% in the preliminary release”
• JPMorgan economist Allan Monks says there’s an unusually wide spread of views among economists going into today’s announcement
  • He expects growth of 0.4% given limited evidence of a slowing in the published data and on the strength in the July services data in particular
• The pace of expansion is likely to beat the BOE’s August forecast by some margin and convince the MPC that the shock to the economy from the vote has so far been less acute than feared, Bloomberg Intelligence economist Dan Hanson writes
  • That should all but erase the chances of a further rate cut this year, he says
• Nomura analyst Jordan Rochester says a positioning squeeze in GBP is unlikely as market is more concerned about politics, and says risk-reward would still favor being short
  • Rates strategist at Nomura, Andy Chaytor, suggests receiving November MPC-dated Sonia and perhaps even February-dated, given the curve is so flat

Economic Release Details: {SWRRATEI Index ECOD} --NIKLAS MAGNUSSON

(Bloomberg) -- Sweden’s Riksbank policy rate est. unchanged at -0.5%, according to all but one of 27 forecasts in a Bloomberg News survey.

• Press conference due 1.5 hours after rate decision
• NOTE: Riksbank Won’t Extend QE on Thursday, Poll Shows

(Bloomberg) -- U.K. macro focus will be firmly on the 3Q GDP data due this morning. With consensus looking for +0.3% q/q and +2.1% y/y, credit market reaction to any meaningful deviation from these levels could be sharp. A high print may appease Brexit concerns, bolster risk appetite; weak numbers could highlight macro deterioration, push risk asset spreads wider, Bloomberg strategist Simon Ballard writes.

• U.K. banks and insurers may lose EU passporting rights after Brexit, according to Trade Minister Mark Garnier; uncertainty may damp near-term price performance in sector
  • Financial sector sentiment may be buoyed Thurs by better-than-consensus Deutsche Bank, Barclays earnings
• Asian equity, credit markets weaker overnight leading EUR/U.S. equity futures lower; may damp early EUR credit mkt price performance Thursday

• Risk Appetite Model looking well anchored into end-October
• Bloomberg Barclays Eur-Agg Corporate index closed unchanged yday at 110bps; Bloomberg Barclays Eur HY index also closed flat at 370bps
• CDX IG closed +0.7bps at 75.0; iTraxx Asia Ex Japan IG is currently -0.5bps at 115.00 and iTraxx Australia quoted +0.25bps at 102.75

NEWS

• Corporate News
• Volkswagen 3Q Profit Beats Est.; FY Forecast Adjusted Higher
• ABB 3Q Operational Ebita Slightly Beats, Orders Miss Estimates
• Debenhams FY Rev. In Line, Underlying Pretax Beats Ests.
• BT 2Q Adj. EPS Beats Ests.; Keeps Outlook Unchanged
• Telefonica 3Q Oibda EU4.18b; Est. EU4.06b
• Schneider Electric 3Q Rev. Drops on Middle East; China Improves
• KPN 3Q Adj. Ebitda Beats Ests.; Keeps Outlook Unchanged
• Volvo Cars Says 3Q Operating Profit Rises 62%
• Fresenius SE 3Q in Line, Raises Lower End of FY Guidance
• Statoil 3Q Adj. Net Falls to Loss vs Est. for Gain; Div. Matches

• Financial News
• Deutsche Bank Posts Unexpected 3Q Profit; CET1 Ratio 11.1%
• Barclays 3Q Underlying Pretax Beats; CET1 Ratio 11.6%
• BBVA 3Q Net Beats Estimate; Fully Loaded CET1 11%
• Nomura Beats 2Q Profit Estimate, Trims Interim Dividend
• DNB Profit Falls Amid Higher Large Corporate Impairment Losses
• Vontobel Says Assets Under Management Rose on Swiss Clients

• Rating News
• S&PGR Affirms Auckland Council ’AA/A-1+’ Rtgs; Otlk Stable
• NAB Ratings Unaffected By Full-Year Results: S&PGRBulletin

• Other News
• Toyota Looks to Uber for Agility Lessons Before It’s ‘Too Late’
• BOJ Can’t Win as Steps to Spur Loans Risk Slowing Bond Sales
• Hollande Gets No Love From Voters or Investors on S&P Upgrade

ANALYST VIEWS

• October supply in IG non-financials has exceeded €20bn...Ytd we are up at €240.5bn. With likely six weeks worth of business to come, €270bn would be a reasonable target (for the) year. Not a record, but only €20bn or so short of the 2009 deluge: creditmarketdaily.com

NEW ISSUES

• CDC $1b Reg S 3Y MS +29
• Deutsche Hypo EU250m 4Y Snr Unsecured MS +75
• EFSF EU2b 0.4% 5/2026 Tap MS -19
• IFFIm $500m Reg S 3Y FRN 3mL +26
• Land NRW EU1b 30Y MS +18
• Merck & Co EU500m 8Y MS +28, EU500m 20Y MS +50
• Orange EU750m Long 10Y MS +45
• Slovenia EU1b 24Y MS +90
• HomeVi EU200m 5Y FRN, EU128m 6.875% 8/2021 Tap
• Snai EU320m 5NC2 Fixed, EU250m 5NC1 FRN
• Verizon EU3.25b 3-Part and GBP450m 19Y Bonds
• European IG credit pipeline here and HY credit pipeline here
• Issuers exposed to S-T rollover and interest-rate reset risk 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.
• NOTE: EU Credit Daily will not be published Friday October 28. It will return Monday October 31

(Bloomberg) -- VW 3Q operating profit EU3.31b, est. EU3.23b.

• Revenue EU52b, est. EU51b
• Outlook: Company sees 2016 group perating ROS at top end of previous range 5%-6%, revenue at prior year level
• Statement NSN OFP19FAIBMDD
• Earlier: Audi Sees Op Return on Sales Considerably Below 8-10% NSN OFP1486S972N
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