HALISTER: MetLife Hires JPMorgan’s Metzler at Asset-Management Operation

MetLife Hires JPMorgan’s Metzler at Asset-Management Operation

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
JPM US (JPMorgan Chase & Co)
MET US (MetLife Inc)
GS US (Goldman Sachs Group Inc/The)

People
Brendan Gundersen (New York Life Insurance Co)
John Melvin (Hartford Investment Management Co)
Joseph Pollaro (MetLife Inc)

Topics
Who's News - People

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UUID: 7947283

HALISTER1: ECB CHECKLIST: Specific Instruments Not Discussed, Can Do More

ECB CHECKLIST: Specific Instruments Not Discussed, Can Do More

(Bloomberg) -- While the ECB decided there was not enough information to justify discussing specific instruments, President Mario Draghi signaled the Governing Council’s willingness to do more.
  • Draghi also said a public backstop for NPLs “would be very useful”
  • NOTE: Draghi’s opening remarks here; account of last meeting
  • BOND SCARCITY, QE AND CAPITAL KEY
    • Keeps asset-purchase program at EU80b per month
    • The GC discussed the general economic conditions and concluded it didn’t have yet information to take decision
      • Didn’t discuss specific instruments at this point in time
    • ECB wants to stress readiness, willingness, ability to act; proper attention should be given to evidence that’s been received in past few months and ability to exploit flexibility
    • Given prevailing uncertainties, GC will continue to monitor financial and economic developments carefully
    • Headwinds to recovery include U.K. referendum outcome, other geopolitical uncertainty, subdued EM growth prospects, necessary balance sheet adjustment in certain sectors
  • ON BANKS
    • Need to address weak profitability ahead, not the solvency
    • Falling bank equity prices are of some significance for policy makers as could lift cost of capital and return on lending would fall
    • NPLs are a problem that needs to be addressed because it’s an obstacle to the transmission of monetary policy; a public backstop is possible in exceptional times
    • Draghi didn’t comment, when asked for his view on the IMF report that Deutsche Bank may be the biggest contributor to systemic risk among the largest lenders
  • INTEREST RATES
    • Expect them to remain at present or lower levels for an extended period of time, and well past the horizon of the QE program
  • BREXIT
    • It’s a downside risk and one that has materialized
    • Financial markets have weathered spike in volatility with encouraging resilience; financing conditions remain highly supportive
    • Large uncertainties prevail; much will depend on how long it takes for negotiations to be completed
    • Economic forecasts related to Brexit also depend on length of time of negotiations and their result
  • FISCAL POLICY
    • The fiscal stance in the euro area is expected to be mildly expansionary in 2016 and to turn broadly neutral in 2017-18
    • In order to reap full benefits from monetary policy measures, other policy areas must contribute much more decisively, both at national and European level; reform needs differ across euro-area economies, with a focus on lifting productivity, improving business environment
    • In an environment of accommodative monetary policy, a swift implementation of structural reforms will not only lead to higher sustainable economic growth but also make it more resilient to shocks
  • INFLATION
    • Likely to remain low in next few months before picking up later in 2016, in large part owing to base effects and annual rate of change of energy prices
    • Should increase further in 2017, 2018
    • A cross-check confirmed the need to preserve an appropriate degree of monetary accommodation to secure a return of inflation rates towards levels that are below, but close to, 2% without undue delay
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Mario Draghi (European Central Bank)

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UUID: 7947283

HALISTER1: Fed to Reflect Lack of Consensus, Drop ‘Gradual Adjustments’: MS

Fed to Reflect Lack of Consensus, Drop ‘Gradual Adjustments’: MS

(Bloomberg) -- Fed’s “lack of consensus” likely to be reflected in July 27 statement as policy makers have drifted apart after Brexit, given uncertainties about U.S. growth and inflation outlook, Morgan Stanley economist Ellen Zentner, strategist Matthew Hornbach and others write in note.
  • Statement should say that “appropriate policy accommodation” will support economic activity, rather than “gradual adjustments”
  • Much easier for policy makers “to come to a consensus that uncertainty surrounding the outlook has risen”
  • Fed will “ambiguously” point to expectation that FOMC will maintain appropriate level of accommodation, keep fed funds rate target unchanged at 0.25%-0.50%
  • Statement should describe backdrop of moderate growth, further job gains, solid consumer spending, continued housing recovery and signs of weak business investment, low readings of inflation compensation
  • MS sees Fed on hold through end of 2017
  • Mkts are likely to maintain probability of Dec. rate hike near 50%
    • Given likely “muted reaction,” investors should remain neutral on duration and curve shape in U.S. rates mkt ahead of mtg
  • Repricing in rates mkt since Brexit has been predicated on much more dovish Fed outlook, with policy makers staying on sidelines
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ellen Zentner (Morgan Stanley)
Matthew Hornbach (Morgan Stanley)

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UUID: 7947283