HALISTER1: INSIDE ASIA: Yen Climbs 1.4% as BOJ Lined Up; Aussie, Kiwi Jump

INSIDE ASIA: Yen Climbs 1.4% as BOJ Lined Up; Aussie, Kiwi Jump

(Bloomberg) -- Yen is biggest gainer in risk-off mood following drop in U.S. stocks and oil; Aussie and kiwi climb, while other currencies in region pare earlier losses.
  • MSCI AC Asia Pacific Index recovers from earlier loss, now steady; Brent crude futures rebound from more than 2-month low of $44.55/bbl hit yesterday; S&P 500 fell 0.3% from record high
  • Dollar Index declining for second day
  • Market is anticipating Fed meeting signaling more hawkishness for “real live” meeting in Sept. or Dec., Saxo Capital global macro strategist Kay Van-Peterson says
    • Decline in some Asian currencies reflects central bank bias for loosening policies because of shakier global fundamentals
  • Yen rises as much as 1.4% to 104.30, heading for second day of gains for first time in 2 weeks, boosted as Finance Minister Aso speaks in Tokyo
    • Yet to decide on size of stimulus package, will leave actual policy measures in BOJ’s hands: Aso
    • Leveraged funds quick to sell USD/JPY earlier on headlines saying Japan stimulus draft calls for continued cooperation with BOJ, Asia-based FX trader says
    • Govt hopes BOJ will achieve 2% inflation target, according to draft; doesn’t give details on size of stimulus or measures to boost consumption
    • Cabinet Office forecast says govt won’t achieve target of having primary balance surplus by fiscal 2020
    • Economy Minister Ishihara says fiscal situation is tough, structural reforms are necessary
    • BOJ Preview: Yen should advance with or without additional BOJ easing this week as market has priced in central bank action, analysts say
  • Yuan steady after PBOC strengthens yuan fixing by 0.12%
    • PBOC injects 130b yuan with 7-day reverse repos
    • HSBC China Monetary Conditions Index at 5-yr high on weaker yuan
    • China has basis for interest rate or RRR cuts, Securities Daily says
  • Won declines for second day
    • S. Korea 2Q GDP expands 3.2% y/y vs +3.0% est., +2.8% in 1Q; +0.7% q/q vs est. 0.6%
    • Private consumption boosted growth, helped by tax subsidies for car purchases, according to Samsung Securities
    • Trade Minister Joo says decline in exports to worsen in July
  • Aussie and kiwi both jump 0.7%, moving sharply higher on Aso’s speech
    • Australia CPI will need to miss est. by wide margin for AUD to weaken significantly as market has priced in further RBA easing: Analysis
    • 2Q CPI data tomorrow; median est. +1.1% y/y vs +1.3% prior; bond yields rising ahead of data, 3-yr up 3 bps at 1.507%, 10-yr rises 1 bp to 1.927%
    • New Zealand’s June trade surplus at NZ$127m vs NZ$150m est., revised NZ$348m prior
    • 2Q exports rise on log, kiwifruit shipments
  • Ringgit’s decline extends to seventh day, longest stretch since May-June 2015, as lower oil prices continue to weigh
    • Malaysian Institute of Economic Research keeps nation’s 2016 GDP growth forecast at 4.2%; 2017 seen at 4.5%-5.5%
    • Malaysian and Thai 5-yr credit protection costs rose most in a month yesterday
  • Philippines’ trade deficit narrowed to $2b in May vs revised $2.3b in April and median est. $1.5b; peso little changed
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Kay Van-Petersen (Saxo Bank A/S)

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HALISTER: McDonald’s Plans to Sell Malaysia, Singapore Franchises

McDonald’s Plans to Sell Malaysia, Singapore Franchises

(Bloomberg) -- The 20-year franchise rights in Malaysia and Singapore combined could fetch at least $400m, according to people familiar with the matter.
  • A potential bidder is in talks with banks for ~$200m-$300m financing, said the people, asking not to be identified because the information is private
  • McDonald’s has adopted a “development licensee model” for the two markets, a Singapore-based spokeswoman for co. said in e-mailed response to Bloomberg queries
  • Co. is negotiating with candidates “who are committed to helping accelerate growth and innovation in Malaysia and Singapore”: spokeswoman
  • NOTES:
    • July 8: McDonald’s Corp. is also selling operations in China, Hong Kong, South Korea
    • March 31: Co. said in March it aims eventually to have 95% of its restaurants in Asia under local ownership
    • Co. has more than 120 restaurants with ~9,000 employees in Singapore; more than 250 restaurants in Malaysia: websites
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
MCD US (McDonald's Corp)

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UUID: 7947283

HALISTER1: INDIA RATINGS: Birla Corp, Jaiprakash Cut; Vinayaka Raised

INDIA RATINGS: Birla Corp, Jaiprakash Cut; Vinayaka Raised

(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
  • Birla Corp.
    • Long-term rating cut to AA from AA+ at Crisil
    • Cites moderation in capital structure and debt protection metrics
  • Jaiprakash Power Ventures
    • LT bank facilities cut to D from B at Care
    • Cites delays in debt servicing due to weak liquidity
  • SP Superfine Cotton Mills
    • LT term loans and fund-based facilities cut to D from B- at ICRA
    • Cites delays in debt repayment obligations due to stretched liquidity in last 6 mos.
UPGRADES
  • Vinayaka Microns
    • LT rating cut to BB- from B+ at Crisil
    • Cites expectations of improved business profile over medium term
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
BCORP IN (Birla Corp Ltd)

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UUID: 7947283

HALISTER1: Amundi Favors Brazil, Russia and Indonesia Debt as Inflows Rise

Amundi Favors Brazil, Russia and Indonesia Debt as Inflows Rise

(Bloomberg) -- Amundi Asset Management sees EM debt gaining as Fed delays rate increase until 2017, Eric Brard, global head of fixed income, says in interview.
  • Prefers USD debt of Brazil and likes both local and USD bonds of Russia and Indonesia
  • EM USD debt returned 12.6% ytd: Bloomberg index
  • READ: Trillion-Dollar Manager Amundi Sees Treasury Gains as Fed Delays
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Eric Brard (Amundi SA)

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HALISTER: Ericsson CEO Vestberg Succumbed to a Vision That Never Came

Ericsson CEO Vestberg Succumbed to a Vision That Never Came

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
ERICB SS (Telefonaktiebolaget LM Ericsson)
40978Z CH (Huawei Technologies Co Ltd)
NOKIA FH (Nokia OYJ)
ALU FP (Alcatel-Lucent SA)

People
Hans Vestberg (Svenska Handbollsforbundet)
Jan Frykhammar (Telefon AB LM Ericsson)
Leif Johansson (Royal Swedish Academy Of Engg)
Neil Campling (Aviate Global LLP)

Topics
Who's News - People
Management Changes

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HALISTER1: Aussie Resilient Unless 2Q CPI Misses by Wide Margin: Analysis

Aussie Resilient Unless 2Q CPI Misses by Wide Margin: Analysis

(Bloomberg) -- Australia’s 2Q CPI data will need to miss median est. by a wide margin for Aussie to weaken significantly further as mkt has already priced in further RBA easing, according to Bloomberg strategist Michael Wilson.
  • 1-year OIS is at 1.43% compared with RBA’s cash rate of 1.75%, indicating investors have already priced in more than one rate cut from August
  • 2Q CPI probably rose 1.1% y/y, down from an already modest 1.3% prior, according to median est. in Bloomberg survey
    • Forecasts range from 0.8% to 1.5%; data due tomorrow 11:30am Sydney time
  • Aussie’s resilience is illustrated in its price action as it trades closer to YTD high of 0.7835 reached in April even after weak 1Q CPI, compared to YTD low of 0.6827 in Jan.
    • Since then, wage growth after inflation continued to improve while RBA confirmed easing bias; if not for the relatively elevated AUD, inflation may have already started to revert to RBA’s target of 2-3%
    • AUD/USD is only ~100 ticks lower from 1Q 2015 levels even as inflation missed RBA 2-3% target band for past six quarters
  • A test of the 0.7412 50-DMA from current levels of 0.7485 is possible if 2Q CPI prints below worst estimate, allowing RBA to signal further cuts
  • NOTE: RBA still cut rates after 1Q CPI even as unemployment rate declines
  • 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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HALISTER1: SGD/JPY May Breach 21-DMA Support on Momentum Signals: Charts

SGD/JPY May Breach 21-DMA Support on Momentum Signals: Charts

(Bloomberg) -- SGD/JPY could extend decline to 75.12 level near term if able to convincingly breach 21-DMA support, Bloomberg strategist Andrew Robinson writes.
  • 75.12 represents 61.8% Fibonacci retracement of rally from June 24 to July 21
  • Slow stochastics and Williams %R are both declining
  • MACD has turned lower, heading toward signal and zero lines
  • Japan’s draft stimulus plan calls for continued cooperation with BOJ but doesn’t detail size or economic effects of stimulus
  • SGD/JPY down 0.9% at 77.00 today; 21-DMA is at 76.93
  • 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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