Halister News

(Bloomberg) -- Credit-market sentiment likely to be firm at the start of the week following weakness late last week, though focus squarely on Wednesday’s FOMC and BOJ meetings, Bloomberg strategist Simon Ballard writes.

• Fed funds’ futures pricing just 20% probability of a U.S. rate increase this week
• Latest statement from ECB CSPP due later today; should help to underscore backstop bid status of ECB for EUR corp bonds
  • Asian credit markets firmer overnight and EU, U.S. equity futures higher this morning; notwithstanding idiosyncratic headline risk, corporate bonds should remain asset class of choice for incremental yield

• Risk Appetite Model: Small uptick in vol and spread dispersion highlights mkt fragility
• Bloomberg Barclays Eur-Agg Corporate index closed at 111bps (+1bps) on Friday; Bloomberg Barclays Eur HY index closed at 412bps (+5bps)
• CDX IG closed +1.2bps at 78.35 in overnight session; iTraxx Asia Ex Japan IG currently -1.3bps at 112.03 and iTraxx Australia quoted -0.1bps at 98.62

NEWS

• Corporate News
• Noble Group Hunts Investor as Profit Seen Up to 2 Years Away
• Petra Diamonds Beats Est. for Adj. Ebitda, Won’t Declare Div.
• HTC Surges After Report New Smartphone Model to Be Unveiled
• EDF Cashes in on U.K. Heatwave That Sent Power Prices Soaring

• Financial News
• Macquarie Bank Reiterates FY17 Forecast
• China Bank to Loan $450B to Help Modernize Agriculture by 2020
• Russia Revokes License of Top-100 Lender Finprombank

• Credit Rating News
• S&PGR Afrms Woori Rtg; Lifts SACP; Rates Proposed Notes ’BB+’
• QT Mutual Bank Ratings Kept On Watch Dev: S&PGR

• Other News
• Bond Traders Trap Fed in No-Win Situation as Rate Call Looms
• Basel Rule Blitz Forces Danes to Fix $420 Billion Bond Market

ANALYST VIEWS

• Technicals arising from the ECB’s ongoing bond grab, allied with the fundamentals of a still-difficult economic environment means that we are in low/negative yield territory for a good while yet: creditmarketdaily.com

NEW ISSUES

• Hoist Kredit EU50m 3.125% 12/2019 Tap 104.375
• Intralot Capital EU250m 5NC2 Snr Notes 6.75%
• Ziggo EUR 2.57b Equiv EUR/USD 10Y Sec, $625m 10Y Unsec Nts
• 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) -- Expect an unchanged policy announcement from Norges Bank on Sept. 22 and an upward revision to the central bank’s rate path, although it will probably still show a 50% chance of a cut before year-end, Danske Bank chief analyst Arne Lohmann Rasmussen writes in a client note.

• Clear signs now that growth in Norway’s economy is picking up; risk of deeper, protracted downturn has decreased greatly since Norges Bank announcement in June
• Additionally, housing market has tightened considerably over the summer
• This means further rate cut is no longer necessary due to growth concerns and less desirable given housing-market dynamics
• Inflation has also been higher than expected
• High Nibor premiums and relatively strong NOK mean a 2016 cut can’t be ruled out

(Bloomberg) -- Anti-Money Laundering Council building more cases against individuals for alleged roles in theft of $81m Bangladesh reserves, Deputy Director Vencent Salido tells reporters in Manila.

• Rizal Commercial Banking officials among them, Salido says, declining to identify them or elaborate
• Council found evidence that bank didn’t provide
• Criminal complaints to be filed at justice dept for preliminary investigation
• NOTE: Philippines to Support Bangladesh in Recovery of Heist Money Link
• NOTE: Philippine Justice Department Ends $81m Bangladesh Heist Probe Link

--RICHARD FROST

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery

DOWNGRADES

• Best Milk Products
  • Long-term loan facilities cut to BB from BB+ at Crisil
  • Expects revenue to remain subdued over the medium term

• New Delhi Television (NDTV)
  • LT bank facilities cut to BBB+ from A- at Care
  • Cites continued deterioration in financial risk profile of the company

UPGRADES

• Alankit Assignments
  • LT bank facilities raised to BB+ from BB at Care
  • Cites profitable scale up of operations

• GMR Sports
  • Fund-based limits raised to B+ from D at ICRA
  • Cites timely servicing of debt obligations since May

• Haldia Petrochemicals
  • Term loans raised to A- from BBB+ at ICRA
  • Cites continuing robust financial performance due to high tolling margins, near full capacity utilization of plant leading to healthy cash accruals

• Mahak Synthetics
  • LT loan facilities raised to BB from BB- at Crisil
  • Expects improvement in scale of operations

(Bloomberg) -- USD/JPY may head toward 100 unless the BOJ surpasses easing expectations at its Wednesday policy review, with market positions indicating investors are weighted for yen strength, Bloomberg strategist David Finnerty writes.

• FX pair have failed to breach bear trendline resistance; slow stochastics remain bearish with %D reading of 41 and declining
• Market is positioned for downside in FX pair, as media reports on BOJ have left investors lacking clarity on what actions, if any, the central bank may take
  • USD/JPY 1-mo. risk-reversals have a bearish tone with investors having to pay a premium for puts for USD/JPY to drop over calls
  • Leveraged funds have a net long JPY position of 53,352 contracts in week ended Sept. 13 vs average of 32,625 contracts this yr, according to CFTC data
• While Gov. Kuroda said last month there is ample room for more easing, Sankei and WSJ have reported BOJ board are split
• FX pair may be under pressure should BOJ stand pat or announce incremental moves. USD/JPY fell more than 3% when BOJ decided to raise ETF purchases by 2.7t yen at July policy meeting, which was seen as limited by investors
  • 28 out of 40 economists forecast BOJ will leave its annual rise in monetary base at JPY80t, while 26 see no change in the policy rate in a Bloomberg survey
  • Nikkei said Sept. 14 BOJ will place further negative interest rates at the focus of policy; USD/JPY rose initially with introduction of negative rates on January 29 before falling through Feb on concern over impact on banks’ profits
  • USD/JPY pair rallied in 2013 and 2014 when BOJ announced increases in JGB purchases. With analysts who forecast additional easing expecting at least a 10t yen expansion, a smaller amount may further spur questions over policy limits
• FX pair may also be weighed down by FOMC meeting; investors are expecting just a 20% probability of Fed hike at the Wednesday meeting, so USD/JPY unlikely to find support from FOMC. Any lowering of Fed dot plan for 2017 onwards may further weaken FX pair
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

(Bloomberg) -- AUD, NZD and CAD all trading above Friday’s close against USD as WTI crude futures rise 1.1% to $43.49/bbl

• Contract hit a fresh low for month at $42.74 in New York on Sept. 16 amid CPI inspired gains in the dollar
• Bloomberg dollar index down 0.1% to 1192.04