Halister News

(Bloomberg) -- U.K. July CPI y/y est. 0.5% vs prev. 0.5%

• U.K. July CPI m/m est. -0.1% vs prev. 0.2%
• U.K. July CPI core y/y est. 1.4% vs prev. 1.4%

(Bloomberg) -- Recently established anti-money laundering department within the Monetary Authority of Singapore to conduct “more frequent, focused inspections” of financial institutions seen as facing higher risks, Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of the regulator says in written answer to parliament.

• Tharman says not possible to prevent regulatory breaches and misconduct with more than 1,500 financial institutions in Singapore; strong enforcement capability needed to shape market-participant behavior and deter unethical behaviour and complacency
• Ambit of new department will expand beyond capital markets misconduct offences, to include banking and insurance sectors: Tharman

(Bloomberg) -- India’s bond-market rally could continue and even gather momentum, amid an outlook for consumer prices to decline further, says Sandeep Bagla, associate director at Trust Capital Services India, in an interview.

• “It is expected that CPI over the next couple of readings could reach as low as 5.20%,” says Mumbai-based Bagla; says CPI’s trajectory has become more important than WPI’s
• Sees 10-year govt bond yield falling to 6.90% over next few weeks
• Related story: July CPI climbed 6.07% y/y, quicker than median est. +5.9% and above RBI’s band of 2%-6% for CPI
• NOTE: July wholesale prices rose 3.55% Y/y; est. +2.84%

(Bloomberg) -- Credit mkt volumes may stay muted for the next 3 weeks ahead of U.K. Bank holiday and U.S. Labor Day; but foundations of risk appetite should remain firm as BOE and ECB maintain monetary accommodation with chance of another U.S. rate increase this year not looking bright, Bloomberg strategist Simon Ballard writes.

• Politics becoming key driver of investor sentiment on both sides of Atlantic; may put pressure on (GBP, USD) spreads
  • Polemic over Donald Trump as Republican presidential nominee steadily intensifying
  • GBP credit spreads shrugged off Brexit concerns, but debate over timing of invoking Article 50 now holds potential to create renewed pressure on asset class sentiment
• Asian credit mkts mixed overnight, with Japan equities lower on yen rally; EU open seen firm
• Risk Appetite Model, after mirroring 2010 volatility pickup, now firmly back in risk on territory with demand/supply dynamics robust
• CDX IG closed +1.1bps at 76.20 in overnight session; iTraxx Asia Ex Japan IG currently -0.1bps at 114.24 and iTraxx Australia quoted -0.7bps at 102.06

NEWS

• Corporate News
• BHP Billiton FY Underlying Profit Beats Estimate
• San Miguel 2Q Net Income 17b Pesos Vs 6.34b Pesos Yr Ago
• Cathay Profit Margin Strained as Fuel Hedging Losses Mount
• Jet Airways Falls After First-Quarter Profit Declines 54%
• Eletrobras 2Q Net BRL12.7b, W/RBSE Offsetting Angra Impairment
• Schindler 1H Rises Y/y, Sees ‘Slight Decline’ in Market in 2016
• Wood Group Keeps FY 2016 Guidance; Wins $700m Kazakh Contract
• Honda Sees 20% Industrywide Sales Jump on Indonesian Tax Amnesty

• Financial News
• Temasek Invests in ICICI as Indian Banks Move to Clear Bad Loans
• Mizuho Said to Form Alliance With Maybank’s Kim Eng on Equities

• Credit Rating News
• Noble Group Gets Downgraded by Moody’s on Liquidity Outlook
• DBS Says $148.3m Credit Facility Is Its Only Loan to KrisEnergy
• Moody’s assigns first-time ratings to CRDB Bank Plc

• Other News
• Fed Orthodoxy Shows Cracks as Another Top Official Urges Rethink
• Brexit Vote Creates Buying Opportunity for Activist Investors

ANALYST VIEWS

• The CSPP will offset potential spread widening from the pick-up in new issue activity that will follow as the holiday season comes to an end: Danske Bank
• The run into year-end will begin in earnest at the beginning of September. That is when we would have had enough time to ponder the ECB/BOE dual QE actions and their impact on the corporate bond markets: creditmarketdaily.com

NEW ISSUES

• Nordea Bank GBP150m 2.375% 2022 Tap UKT +90
• 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.

Economic Release Details: {INFINFY Index ECOD} --KARTHIKEYAN SUNDARAM

(Bloomberg) -- Chinese government bonds in offshore markets have “become a target” as investors ignore weakening economic data in the hunt for yields, Mizuho Bank Asian FX strategist Ken Cheung writes in a note today.

• Yield of CNH China govt bonds is relatively higher than what other major treasury products offer
• Secondly, yuan is expected to hold ahead of the G-20 Summit on Sept 4-5, with investors expecting PBOC to defend RMB at 6.70 per dollar
• Thirdly, yuan’s inclusion in SDR basket and opening of onshore market would boost demand for Chinese assets. Inflows will also support CNH govt bonds
• NOTE: Yield of 10-yr CNH government bond closed at 3.201% yesterday, lowest since March 2013
  • 10-yr CNY govt note little changed today at 2.65%