HALISTER1: Brazilian Real Rises 4 Out of 5 Days; Oil May Help Slow CPI

Brazilian Real Rises 4 Out of 5 Days; Oil May Help Slow CPI

(Bloomberg) -- BRL opens higher for 2nd day in a row as commodities-linked peers rise after BOJ focus shifts and ahead of FOMC meeting.
  • BRL rises 0.5% at 3.2422 per dollar; DI Jan 21 rate -7bps
  • Petrobras said to mull reducing gasoline prices by year-end: Globo
  • BCB auctions up to 5,000 reverse FX swaps, 9:30am-9:40am local time; releases weekly report on flow, 12:30pm local
  • Lula faces trial as Brazil judge accepts corruption charges
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PETR4 BZ (Petroleo Brasileiro SA)

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UUID: 7947283

HALISTER1: JPY Rates Vol May Drop Toward Nikkei 225 on Yield Fix: Charts

JPY Rates Vol May Drop Toward Nikkei 225 on Yield Fix: Charts

(Bloomberg) -- JPY long-tail gamma has room to close gap with Nikkei 225 vols as BOJ narrows distribution of long-end rates (see chart here), Bloomberg strategist Tanvir Sandhu writes.
  • BOJ is guiding the market to where the fair curve is to be by conducting fixed-rate purchase operations and targeting 10-year JGB yield at current levels
  • Rates volatilty may continue to fall with BOJ applying tighter control on JGBs, in turn narrowing the distrubition of rates
  • JPY 3m30y implied vol -6bp/annual at 54bp/annual while rates curve twist-flattened
  • Nikkei vol has declined after BOJ announced buying of ETFs that track TOPIX, with no cut to IOER supporting financials
  • BoJ will purchase JGBs “so that 10-year JGB yields will remain more or less at the current level” while “In case of a spike in interest rates, the Bank stands ready to conduct fixed-rate JGB purchase operations”, see more here
  • NOTE: Tanvir Sandhu is an interest-rate and derivatives strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Turkey Stocks Extend Gains as Moody’s Sees Fading Impact of Coup

Turkey Stocks Extend Gains as Moody’s Sees Fading Impact of Coup

(Bloomberg) -- Borsa Istanbul 100 Index extends gains to 0.5% to 77,711.15 as of 2:02pm in Istanbul after Moody’s says in intw w/ Reuters that economic shock from coup has largely dissipted.
  • Ulker +3.1%, Akbank +0.5%, Bim +0.8%
  • NOTE: Moody’s: Turkey Economy Shock From Coup Largely Dissipated
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
AKBNK TI (Akbank TAS)
BIMAS TI (BIM Birlesik Magazalar AS)
ULKER TI (Ulker Biskuvi Sanayi AS)

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UUID: 7947283

HALISTER: BOE Warns Insurers to Stop Cutting Prices to Win More Business

BOE Warns Insurers to Stop Cutting Prices to Win More Business

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
MUV2 GR (Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen)
AON US (Aon PLC)
BEZ LN (Beazley PLC)
HSX LN (Hiscox Ltd)
WLTW US (Willis Towers Watson PLC)

People
David Rule (Prudential Regulation Authority)
John Nelson (Society of Lloyd's)

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UUID: 7947283

HALISTER: Clawing Back Bankers’ Pay at Wells Fargo Is Harder Than It Looks

Clawing Back Bankers’ Pay at Wells Fargo Is Harder Than It Looks

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
WFC US (Wells Fargo & Co)
32663Z US (United States Senate)

People
Carrie Tolstedt (Wells Fargo & Co)
Charles Elson (University of Delaware)
Elizabeth Warren (United States Senate)
Javier Martin-Artajo (JPMorgan Chase Bank)
John Stumpf (Wells Fargo & Co)

Topics
BGOV Finance

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UUID: 7947283

HALISTER1: EUR FRA/OIS and 5Y5Y 3s6s Basis to Widen: BofAML

EUR FRA/OIS and 5Y5Y 3s6s Basis to Widen: BofAML

(Bloomberg) -- TLTRO-2, corporate issuance and richness of bonds vs OIS should see renewed widening of EUR FRA/OIS and 5Y 3s6s basis, Bank of America Merrill Lynch strategists Sphia Salim and Ruairi Hourihane write in a client note.
  • BofAML favors March 2017 FRA/OIS and 5Y5Y 3s6s basis widening
    • Enter March 2017 FRA/OIS widener at 6.25bps, targeting 10bps, with stop-loss at 4bps
  • Relationship between widening FRA/OIS and deterioration of bank credit-worthiness has broken down, with spread tightening since end of June, as dealers hedge flows
  • Euribor reform in June 2017 may also limit further tightening pressures
    • Buying of government bond futures vs OIS has been a key driver; hedging these flows has led to tightening FRA/OIS
  • Bond futures now look very rich again vs OIS, which could see reversal of tightening trend
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ruairi Hourihane (Merrill Lynch International)
Sphia Salim (Bank of America Corp)

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UUID: 7947283