HALISTER1: Sell USD/JPY on Trump Debate Win, Buy on Clinton Win: BK Asset

Sell USD/JPY on Trump Debate Win, Buy on Clinton Win: BK Asset

(Bloomberg) -- Market hasn’t sufficiently priced in possibility of Trump emerging out of tonight’s debate victorious, and for this reason, larger reaction in currencies will be to a Clinton defeat, BK Asset Management managing director Kathy Lien writes in note received today.
  • If Clinton crushes Trump, stocks will rise, USD/JPY will gain, Canadian dollar will advance and EM currencies like MXN and CNY will move higher because they stand to lose the most from a Trump presidency
  • If Trump defeats Clinton, USD/JPY will fall quickly and aggressively, USD/CAD will hit a fresh 5-mo. high above 1.3250 and EM currencies will tank
  • USD/JPY steady at 100.36
  • USD/CAD steady at 1.3225
  • NOTE: Clinton, Trump face high-stakes debate in unpredictable race; story here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Kathy Lien (Bk Asset Management)

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UUID: 7947283

HALISTER1: Investor Conviction on Credit, USTs, Stocks Wanes: Absolute Poll

Investor Conviction on Credit, USTs, Stocks Wanes: Absolute Poll

(Bloomberg) -- Investors polled by Absolute Strategy are skeptical about a further narrowing of credit spreads and think higher stock valuations are unlikely, according to analysts including Dorothee Deck.
  • The number expecting the U.S. yield curve to flatten has dropped to 47%, vs 59% in its last poll in June
  • Uncertainty is elevated with more than 25% of respondents having “no strong opinion” about whether gold or oil will be higher a year from now, about whether U.S. real yields will increase, and whether the USD will advance
    • Two of the areas where respondents have highest conviction are on the outlook for 2Y and 10Y UST yields, with a 65% implied probability 2Y yields will rise and a 61% implied probability that 10Y will be higher; though these are down 7% and 4% respectively from the last poll
  • The third top area of high conviction is that implied equity volatility will be higher, with a probability of 62%; again that is lower than in June when it was 65%
  • Investors are bearish on the global business cycle for the first time since Absolute surveys began in December 2014
  • A total of 201 respondents representing institutions with $3t AUM participated in the survey in the two weeks ending Sept. 16
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Business Insider: US sanctions Chinese company tied to North Korea's nuclear program

Business Insider: US sanctions Chinese company tied to North Korea's nuclear program

Alert: HALISTER1
Source: BLG (Blogs Web Content)

People
Barack Obama (United States of America)
Leslie Caldwell (United States Department of Justice)
Li Keqiang (People's Republic of China)

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UUID: 7947283

HALISTER: Yen Rises as U.S. Politics Collide With Brexit and Deutsche Bank

Yen Rises as U.S. Politics Collide With Brexit and Deutsche Bank

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DBK GR (Deutsche Bank AG)

People
Barack Obama (United States of America)
Ned Rumpeltin (Toronto-Dominion Bank/The)
Peter Rosenstreich (Swissquote Group Holding SA)
Sam Lynton-Brown (BNP Paribas SA)

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UUID: 7947283

HALISTER1: Yield Curve to Steepen No Matter Who Is Elected President : BMO

Yield Curve to Steepen No Matter Who Is Elected President : BMO

(Bloomberg) -- Both Trump and Clinton’s policy platforms increase the federal deficit and spending, leading to a steeper yield curve in the near-term, BMO strategists Aaron Kohli and Dan Belton say in note.
  • Prospect of Trump victory may drive immediate rally in rates
    • Clinton victory to cause smaller steepening, especially if Congress remains Republican-controlled
  • Senate election has been “woefully under-covered,” has just as many legislative implications
  • Party split between president and Senate should limit curve movement
  • Debt ceiling, increases in debt issuance, and potential FOMC changes most relevant for rates mkts
  • Related story, USD/MXN Could Trade Above 20 If Trump Does Well in Debate: BMO
  • Related story, Congress Election More Important to Mkts Than U.S. President: DB
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
Daniel Belton (Bank of Montreal)

Topics
Government Appointments, Political Changes

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UUID: 7947283

HALISTER1: JPM Revises High Yield Total Return Forecast for 2016 to 17%

JPM Revises High Yield Total Return Forecast for 2016 to 17%

(Bloomberg) -- Total return for U.S. high yield bonds in 2016 is expected to be 17%, up from an original estimate of 12%, in what would be the strongest performance for the asset class since the financial crisis, JPM strategists led by Peter Acciavatti write in note.
  • Expect spreads to end the year at 550bps, revised from an earlier estimate of 800bps
  • Expect yields for high yield to end the year at 6.75%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Peter Acciavatti (Bear Stearns & Co Inc)

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UUID: 7947283