HALISTER1: Brazil May See Bigger Rate Cut If Prices, Reform Allow: Analysts

Brazil May See Bigger Rate Cut If Prices, Reform Allow: Analysts

(Bloomberg) -- An official measure of Brazilian prices, the IPCA due Friday, may reinforce the case for a wider BCB rate cut if easing inflation coincides with substantive progress on reforms, analysts say.
  • September CPI, forecast to slow to 0.2%, is compatible with a 25bps Selic cut at October’s BCB meeting, Joao Souza Fernandes, economist at Quantitas, says in a phone interview
    • “Food prices are likely to be the main driver for the inflation slowdown”
  • NOTE: Sept. IPCA m/m, est. 0.20%, prior 0.43%
    • A “combination of factors” such as the spending cap bill being approved without changes in Lower House, or a CPI of 0.2% or below with services prices slowing down, could lead market to expect a 50bps cut in October, Fernandes says
    • Wide support for spending cap bill, potentially likely to be approved with 380-400 votes in Lower House according to newspaper Globo, would be seen as a “strong signal” that Temer govt has support to pass broad reforms in Congress
  • NOTE: Swaps rates price in 33bps cut at Oct. BCB meeting, meaning traders split between 25bps-50bps cut
  • Sept. CPI may show more benign services inflation, reflecting weak activity and the end of Olympic Games, Jose Antonio Pena, chief-economist at Portopar Dtvm, says
    • “The chance of a 50bps cut have been increasing as the three points mentioned as conditions by Copom are evolving”
  • NOTE: BCB has signaled that monetary easing depends on food and services prices ease, along with fiscal policy improvement
    • BCB’s Goldfajn earlier today said there is no pre- established schedule to lower the key rate
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ilan Goldfajn (Banco Central do Brasil)
Jose Pena Garcia (Portopar Dtvm Ltda)
Michel Temer (Federative Republic of Brazil)

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HALISTER1: Newfoundland and Labrador Hydro - DBRS Rating Report

Newfoundland and Labrador Hydro - DBRS Rating Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

Tickers
80543Z CN (Province of Newfoundland and Labrador Canada)

People
Tom Li (DBRS Inc)

Topics
Fixed Income Research
Credit Analysis Research
Credit Research
Investment Research
Issuer Focused Research

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UUID: 7947283

HALISTER: Deutsche Bank Is Pressured Because ‘It’s So Small,’ Altman Says

Deutsche Bank Is Pressured Because ‘It’s So Small,’ Altman Says

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DBK GR (Deutsche Bank AG)
EVR US (Evercore Partners Inc)
JPM US (JPMorgan Chase & Co)

People
Roger Altman (Evercore Partners Inc)
James Dimon (JPMorgan Chase & Co)

Topics
Who's News - People
Legal Fees

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UUID: 7947283

HALISTER1: ROUNDUP: RBI’s Surprise Cut Supports Rupee, May Not Signal More

ROUNDUP: RBI’s Surprise Cut Supports Rupee, May Not Signal More

(Bloomberg) -- Indian rupee gains after RBI unexpectedly cuts interest rate in Governor Patel’s first policy meeting.
  • Central bank reduced benchmark repurchase rate by 25 bps to 6.25%; only 17 of 39 economists surveyed by Bloomberg predicted a reduction
  • First meeting of new monetary policy committee and decision was unanimous
  • RBI says cut is consistent with aim of reaching CPI of 5% by Q4 of fiscal 2017; cites concerns about weakness in world trade and slowdown in industrial production
  • Yield on 6.97% bonds due Sept. 2026 little changed at 6.771%
  • Rupee up 0.1% at 66.5375; rose as much as 0.3% after decision
  • ANZ (Khoon Goh, head of Asia research)
    • Slower inflation provided scope for RBI to deliver surprise rate cut, with backdrop of weaker global economic growth outlook
    • Rate cut will lead to more stock inflows, supportive of rupee
    • Will be limit to how far rupee can rally
    • Key support for USD/INR is around 66.2 with resistance at 67.1; RBI seems content to keep USD/INR within this range
  • Nomura (Vivek Rajpal, interest-rate strategist)
    • Lower bond yields won’t hold once market moves past initial reaction to cut
    • RBI statement says risks on inflation are tilted to upside, though less so than expected in June & Aug. policy statements
    • “Market cannot assume another rate cut unless we start talking about downside risk to inflation”
    • Bonds should consolidate; 10-year yield at 6.70-80% by end-Dec.
  • DBS (Radhika Rao, economist)
    • Indian bonds lost ground soon after RBI cut possibly because accompanying rhetoric was relatively neutral rather than dovish
    • RBI reiterated March inflation target at 5.0%, but with modest upside risks
    • Stealth easing via pro-liquidity stance will continue to help markets deal with foreign currency non-resident maturities and ensure policy transmission remains on track
  • OCBC (Emmanuel Ng, economist)
    • RBI cut “net positive” for INR near term and shouldn’t hinder recent recovery in net inflows of portfolio capital
    • Cut doesn’t necessarily imply a string of more in future; RBI will probably continue to watch data flow for future moves
  • Trivantage Capital (CIO Nikhil Johri)
    • Scope for one or more rate cuts in the next six months
    • “Interesting part is that it is an unanimous decision by the panel; a 6-0 verdict in favor of a rate cut”
    • “Overwhelming feeling” that inflation is expected to remain around 5% this fiscal year
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Emmanuel Ng (Oversea-Chinese Banking Corp Ltd)
Khoon Goh (Australia & New Zealand Banking Group Ltd)
Nikhil Johri (Trivantage Capital Management India Pvt Ltd)
Radhika Rao P (DBS Bank Ltd)
Vivek Rajpal (Nomura Holdings Inc)

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UUID: 7947283