HALISTER1: BNP Paribas Raises Buy Target for UST 10Y to 1.75%-1.85%

BNP Paribas Raises Buy Target for UST 10Y to 1.75%-1.85%

(Bloomberg) -- Wait to initiate new longs given current market direction driven by technicals and lack of evidence of overbought conditions, BNP strategists say in client note.
  • Stronger domestic data and updated Fed expectations adds to case for higher yields
  • Previously considered re-initiating long 10Y at ~1.60%
    • Current market pricing of ~25% probability of a 25bp Sept. hike compares with 60% in late May when 10Y yields were trading 1.75%-1.85%
  • See a rate hike as early as Sept., with a “small chance” of a Dec. rate hike as well
    • Data to decide timing; rate hike process would start with more upbeat FOMC statement and subsequent hawkish minutes and speeches noting diminished risks
  • NOTE: On July 16, BNP revised 10Y target to 1.40% from 1.60%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: DOJ Charges 3 People in $1b Medicare Fraud, Money-Laundering

DOJ Charges 3 People in $1b Medicare Fraud, Money-Laundering

(Bloomberg) -- Owner of more than 30 Miami-area skilled nursing and assisted living facilities charged with conspiracy, obstruction, money laundering and health-care fraud in connection with a $1b scheme involving numerous health-care providers, DOJ says in statement.
  • Largest single criminal health-care fraud case ever brought against individuals by DOJ, Assistant Attorney General Leslie Caldwell says in statement
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Fed to Leave Door Open to Sept., Without ‘Clear Signals’: BofAML

Fed to Leave Door Open to Sept., Without ‘Clear Signals’: BofAML

(Bloomberg) -- FOMC’s July 27 statement is likely to note “generally better data,” say officials are still monitoring inflation/global risks, and leave door open for Sept. rate hike, BofAML economist Michael Hanson writes in note.
  • Policy makers are “very” likely to keep policy unchanged as they assess outlook and debate need for hikes this yr; statement should give “no clear signals” about Sept.
    • Singling out next mtg would be “notable hawkish surprise” to mkts
    • Fed could cite progress toward dual mandate to suggest it’s “somewhat more comfortable” with a Sept. hike; there’s greater chance that minutes will sound “more upbeat” on potential for Sept.
  • Statement shouldn’t materially change probabilities of rate hikes this yr; “we see a low, but not zero, probability of move in Sept.; BofAML’s base case remains Dec.
  • While domestic data and global financial conditions have improved since Brexit vote, Fed is still watching data and ‘‘should remain cautious”
  • Some chance FOMC will drop “closely” when describing its monitoring of inflation indicators and global developments; that would be seen by mkts as “mildly hawkish”
    • Dropping “monitoring” language completely would be both more hawkish and much less likely
  • Given refusal of St. Louis Fed Pres. James Bullard to submit a long-run dot in June, there may be extended discussion about communications, particularly about dots
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
James Bullard (Federal Reserve Bank of St Louis/MO)
Michael Hanson (Bank of America Corp)

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UUID: 7947283

HALISTER: The Debt Man Can Only Ring Thrice in Student-Loan Robocall Plan

The Debt Man Can Only Ring Thrice in Student-Loan Robocall Plan

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
NAVI US (Navient Corp)
NNI US (Nelnet Inc)

People
Claire McCaskill (United States Senate)
Edward Markey (United States Senate)
Hillary Clinton (United States of America)
Margot Saunders (National Consumer Law Center Inc)
Patricia Christel (Navient Corp)

Topics
BGOV Tech/Telecomm
TOP BGOV Home

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UUID: 7947283

HALISTER1: U.K. Infrastructure Spending Is Key After Brexit Vote, JPM Says

U.K. Infrastructure Spending Is Key After Brexit Vote, JPM Says

(Bloomberg) -- A commitment by U.K.’s new government to improve infrastructure such as housing, transport, energy costs and communications infrastructure could lower business costs, making the country attractive, JPMorgan’s Malcolm Barr writes.
  • Such actions wouldn’t antagonize the country’s trading partners as much as corporation tax cuts, which is important at a point when the U.K.’s relations with them are in flux
  • Some failings of the U.K. infrastructure are becoming chronic with the country at risk of energy rations for manufacturers and repeated criticism of transport infrastructure
  • Monetary policy’s ability to offset shocks to demand is increasingly limited, so fiscal policy has to play a bigger role
  • JPMorgan’s growth forecast for the U.K. includes a change in the fiscal path but, given the uncertainties around the impact of Brexit, there may be little clarity on the size of any programs until closer to the Autumn Statement
  • NOTE: Policy emphasis will shift toward fiscal steps over the next 12 to 18 months; may provide a floor for gilt yields, UBS WM says, while Deutsche Bank says the case for higher rates rests on fiscal policy taking some of the burden off monetary policy
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Malcolm Barr (JPMorgan Chase & Co)
Allan Monks (JP Morgan Chase)

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UUID: 7947283