HALISTER1: USD/IDR Forwards May Retest 2016 Low If CPI Beats Est.: Analysis

USD/IDR Forwards May Retest 2016 Low If CPI Beats Est.: Analysis

(Bloomberg) -- USD/IDR 1-mo. NDF may revisit the year’s low if Indonesia’s CPI for July is higher than forecast, Bloomberg strategist Andrew Robinson writes.
  • CPI probably rose 3.37% y/y following 3.45% increase in June, median est. in Bloomberg survey shows; ests. range from +3.07% to +3.70%; data due today
  • Bank Indonesia sees July inflation at +3.6% y/y, Governor Martowardojo said Friday
  • Firmer inflation could stall further BI easing; central bank held reference rate steady at 6.50% at July 21 meeting, when majority of economists in Bloomberg survey had expected a cut of 25 bps
    • Separate Bloomberg survey shows 25-bp cut seen by yr- end, according to median est.
  • 1-mo. NDF could drop to 12,995, the 2016 low reached on March 17 and 18; now little changed at 13,127
    • Slow stochastics %K line is at 43 and falling
  • NOTE: Andrew Robinson is an FX 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: FX ASIA/RATES WEEK AHEAD: RBA, Japan Stimulus, China PMI, US NFP

FX ASIA/RATES WEEK AHEAD: RBA, Japan Stimulus, China PMI, US NFP

(Bloomberg) -- RBA rate decision, details of Japan PM Abe’s fiscal stimulus, and China PMI report are potential event risks this week, ahead of BOE policy meeting and U.S. non-farm payrolls, Bloomberg strategist Mark Cranfield writes.
  • Click here to see major regional data due this week
  • AUD/USD may be in for a bumpy ride if RBA governor Stevens cuts rate one last time before retiring next month. Pair is 1.7% stronger since last RBA decision on July 5. Inflation running at 1.0% y/y is no impediment to lower rates
    • Majority of economists forecast a 25bps rate cut to 1.50%, according to a Bloomberg survey
    • Australian 3-yr bond yields may extend further into record low territory if RBA maintains a dovish outlook
  • USD/JPY bulls will be looking for support from details of Abe’s fiscal stimulus package on Aug. 2; package said to include 15,000 yen handout per person to those under certain income level
    • BOJ decision on July 29 failed to inspire dollar buying, with option risk reversals showing a pick up in demand for downside protection
    • With USD/JPY below 103.00, risk of verbal intervention is high; however “the path of least resistance for USD/JPY is still lower with a move to 100 appearing likely,” BK Asset Management managing director Kathy Lien writes in note on July 30
    • Japan yield curve ended last week on bear flattening mode after BOJ held short term rate unchanged
  • USD/CNH may find support ahead of 100-DMA if China July manufacturing PMI slips below 50 breakeven line which may increase speculation that PBOC will lower official rates.
  • BOE decision due Aug. 4, est. 0.25% vs prev. 0.5%
  • U.S. non-farm payrolls due on Aug. 5, est. 175k vs prev. 287k
  • NOTE: Mark Cranfield is an FX strategist who writes for First Word. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Glenn Stevens (Reserve Bank of Australia)

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UUID: 7947283

HALISTER1: Aussie May Rise as Economists & Traders Differ on RBA: Analysis

Aussie May Rise as Economists & Traders Differ on RBA: Analysis

(Bloomberg) -- A test of the 0.7676 July 15 high may be seen in reaction to pricing disparity between forecasters and markets over Tuesday’s RBA decision, Bloomberg strategist Michael G. Wilson writes.
  • RBA will cut cash rate to 1.5% from 1.75%, according to 20 of 25 economists in Bloomberg survey; the rest see central bank on hold; announcement due at 2:30pm local time
  • OIS are pricing in 67% chance of a cut, suggesting traders are less confident than the 80% of economists that expect easing
  • In executing their hedging requirements, clients typically consider outlooks and views of economists’ notes received from their banks almost every day.
    • An Australian exporter for example may hold back on buying A$ given the high probability of a cut forecast by their banks’ research departments over that of actual traders’ pricing
    • In the event the RBA doesn’t cut rates or signal further easing or both, A$ could surge to breach last month’s high as exporters scramble to cover their positions
  • A Friday close above the 0.7651 100-WMA would set AUD/USD up for a tilt at 0.7835, the April 21 high
  • NOTE: Michael G. Wilson is an FX strategist who writes for First Word; the observations he makes are his own.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER: Global Earnings Tumble as Companies Dig Deeper for Cost Savings

Global Earnings Tumble as Companies Dig Deeper for Cost Savings

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
COP US (ConocoPhillips)
HON US (Honeywell International Inc)
FB US (Facebook Inc)
GM US (General Motors Co)
MCD US (McDonald's Corp)

People
Charles Stevens (General Motors Co)
Jill Carey Hall (Bank of America Corp)
Jim Paulsen (Wells Capital Management Inc)
John Carey (Pioneer Investment Management Inc)
Mark Luschini (Janney Capital Management LLC)

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UUID: 7947283

HALISTER1: Europe’s Syndicated Bond Sales Beat ‘15 on Yield Chase: Analysis

Europe’s Syndicated Bond Sales Beat ‘15 on Yield Chase: Analysis

(Bloomberg) -- European syndicated new bond sales have totaled EU707.42b so far this year, outpacing the EU695.82b of issuance in the same period of 2015, as investors chase yields down the rating spectrum and along the maturity curve, Bloomberg strategists Simon Ballard and Paul Cohen write.
  • Cumulative year-to-date sales, which picked up after a slow start to the year amid China-related concerns, have been driven mainly by a 22% jump in SSA offerings to EU249.3b
    • Corporate and financial issuance has trailed 2015, except at end-2Q when FIG was cumulatively 103.4% of last year’s volume
  • Despite increased supply, spreads are maintaining a bias to tighten on low interest rates and ECB’s corporate-debt purchases
    • Latest ECB CSPP data show holdings of EU11.849b, as of July 22, albeit with weekly purchases slowing amid a seasonal decline in liquidity
  • Risk assets’ demand-supply dynamics remain robust in spite of global macroeconomic and geopolitical uncertainties, as ultra-loose monetary policy fuels consistent demand for yield and a steady compression of credit spreads
    • EUR IG OAS now ~47bps, vs Feb.’s wides of 102bps; EUR IG total return +5.78% YTD, GBP corporate index +12.29% YTD: BofAML data
    • Lower activity into the typical August lull should further support credit market demand-supply conditions
  • NOTE: Data cover new syndicated EUR, USD Reg S (Eurodollar) and GBP-denominated bonds sold in Europe with a maturity of at least 1.5Y and a minimum issue amount of EU100m
  • NOTE: Simon Ballard and Paul Cohen are credit strategists who write for Bloomberg. The observations they make are their own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER1: Malaysia's Leader Proves Untouchable Despite Big-Money Scandal

Malaysia's Leader Proves Untouchable Despite Big-Money Scandal

Alert: HALISTER1
Source: NYT (New York Times)

People
Abdul Patail (Federation of Malaysia)
Adel Al-Jubeir (Kingdom of Saudi Arabia)
Anwar Ibrahim (Parti Keadilan Rakyat)
Barack Obama (United States of America)
Ibrahim Suffian (Merdeka Center)

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UUID: 7947283

HALISTER1: *SHANGHAI GIANT GROUP TO BUY CAESARS' PLAYTIKA IN $4.4 BLN DEAL

*SHANGHAI GIANT GROUP TO BUY CAESARS' PLAYTIKA IN $4.4 BLN DEAL

Alert: HALISTER1
Source: BN (Bloomberg News)

Tickers
CACQ US (Caesars Acquisition Co)
CZR US (Caesars Entertainment Corp)
002558 CH (Chongqing New Century Cruise Co Ltd)
AAA NA (AP Alternative Assets LP)

People
Jack Ma (Alibaba Group Holding Ltd)
Mitchell Garber (Caesars Entertainment Corp)
Seth Palansky (World Series Of Poker)

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UUID: 7947283