Halister News

--ALESSANDRO SPECIALE

Economic Release Details: {GRIFPBUS Index ECOD} --JANA RANDOW

(Bloomberg) -- German Oct. Ifo business climate est. 109.6 vs previous 109.5.

• German Oct. Ifo current assessment est. 114.9 vs previous 114.7
• German Oct. Ifo expectations est. 104.5 vs previous 104.5

(Bloomberg) -- Demand for 5Y-10Y core euro-area bonds was the highest in a year last week, Citigroup strategist Aman Bansal writes in client note.

• At a country level, net buying was led by France, followed by Finland; Spain led net selling
• Euro linkers saw net buying for a second consecutive week led by Bundei, which has seen the highest net demand for a year
  • Demand for both Italy and Spain was negative over the last four weeks
• Gilts saw small net selling last week, led by the 10y sector
  • 30y sector saw small net buying after six weeks of net selling

(Bloomberg) -- Spanish 10y bond outperformance vs Italy after Spain’s Socialist party leadership cleared the way for Rajoy to form a new govt may continue, say strategists at SocGen and RBS.

• Remain bullish Spain, see further outperformance as Spain converges to semi-core, writes RBS Marco Brancolini in a client note
  • Like to be long 50y Spain vs 30y BTP or 30y UST, targeting flat in both, and long 30y Spain vs OAT target 100bps
• Ongoing worries over Italy make long-term preference for SPGBs over BTPs still appealing, writes SocGen strategists including Marc-Henri Thoumin in a client note
  • See further BTP/Bonos differentiation in coming sessions

(Bloomberg) -- Infrastructure sector may dominate U.K. investor focus Tuesday with government decision expected on South-east England airport expansion; Heathrow or Gatwick. Bonds of winning ‘bidder’ likely to see near-term positive reaction, Bloomberg strategist Simon Ballard writes.

• Well-charged new issue pipeline expected to maintain primary market activity over the coming days; issuers may want to execute ahead of any market slowdown around U.S. election
  • Secondary market spreads remain well anchored; supported by low growth, low rate macro as well as reassurance of implied backstop bid from central banks’ QE
• 3Q corporate earnings season reaching critical mass with credit market sentiment susceptible to variations in “surprise” headlines; Novartis, Syngenta, Orange among key reporters Tuesday

• Risk Appetite Model shows risk remains anchored by macro outlook and QE backstop bid
• Bloomberg Barclays Eur-Agg Corporate index closed yday at 110bps (-1bp); Bloomberg Barclays Eur HY index closed at 367bps (-3bp)
• CDX IG closed -0.5bps at 73.80; iTraxx Asia Ex Japan IG is currently -0.6bps at 114.64 and iTraxx Australia quoted -0.4bps at 102.42

NEWS

• Corporate News
• Orange Earnings Rise 1.6% on Wireless Demand in Spain, Africa
• Anglo American Platinum 3Q Production 1% Higher vs 3Q 2015
• Whitbread 1H Adj Pretax Beats, Sees FY In Line With Expectations
• Fortum 3Q Sales Beat Estimates; Profit a Miss
• Neste 3Q Comparable Operating Profit Misses; Margin Falls Y/y
• National Express Says Continues to Deliver Strong Growth
• Severstal 3Q Ebitda Jumps 11% Q/q to $584m; Est. $566m
• Saab 3Q Operating Profit Misses Estimates; Keeps 2016 Outlook
• Novartis 3Q Sales of Entresto, Cosentyx Slightly Below Estimates
• Norsk Hydro Underlying Ebit Beats; Maintains Global Demand View

• Financial News
• Paschi 3Q Net Loss EU1.15b After Loan Loss Provisions EU1.3b
• Swedbank Beats Estimates as Third-Quarter Profit Jumps 23%
• Julius Baer, DBS Said to Vie for ABN Amro’s Asia Wealth Arm
• St James’s Place 3Q FUM Rises 31%; Net FUM Inflow Increases

• Rating News
• Chalco Outlook Revised to Stable by S&P; BBB- Rating Affirmed
• AT&T May Keep Blue-Chip Status Despite Ratings Cut Warnings

• Other News
• Brexit Confronts U.K.’s Online Lenders With Biggest Test Yet
• Fed Inclined to Raise Rates If Next President Pumps Up Budget
• Euro Traders Start to Believe Lightning Won’t Strike Twice

ANALYST VIEWS

• That level of (ECB) bond acquisition should solicit a much more aggressive tightening trend and the resistance to that happening has certainly flummoxed us. Still, we’re not going wider when other risk assets are selling off: creditmarketdaily.com

NEW ISSUES

• Iren EU500m 8Y MS +80
• Morgan Stanley EU2.75b 2-Part Fixed, FRN
• NordLB EU750m 10Y Covered Bond MS -11
• Rentenbank EU500m 20Y MS -16
• SEB EU850m 12NC7 Tier 2 MS +135
• 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.

(Bloomberg) -- A second straight month of positive growth in Singapore’s industrial production could trigger a USD/SGD slide to 1.3781, Bloomberg strategist Andrew Robinson writes.

• Sept. factory output probably increased 1.0% y/y, up from 0.1% expansion in Aug., median est. in Bloomberg survey shows
  • Ests. range from -0.5% y/y to +3.7%; data due 1pm local time on Oct. 26
• USD/SGD down 0.1% at 1.3918; hasn’t traded below 21-DMA since Sept. 27
  • Slow stochastics are bearish as %K line drops below %D line to 84
• NOTE: Andrew Robinson is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.