HALISTER: ASML 3Q Gross Margin Outlook Beats Ests.

ASML 3Q Gross Margin Outlook Beats Ests.

(Bloomberg) -- ASML forecasts 3Q net sales of ~EU1.7b vs est. EU1.74b.
  • Sees 3Q gross margin of ~47% vs est. 45.7%
  • 2Q net sales EU1.74b vs est. EU1.72b; co. guidance ~EU1.7b
  • 2Q gross margin 42.6% vs est. 42.7%; co. guidance ~42%
  • 2Q net income EU354m vs est. EU338m
  • Expects FY 2016 sales to exceed 2015
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Statement
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
ASML NA (ASML Holding NV)

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HALISTER1: Manulife Likes Malaysian, Indonesian Debt, Wants Onshore Chinese

Manulife Likes Malaysian, Indonesian Debt, Wants Onshore Chinese

(Bloomberg) -- Manulife Asset Management likes sovereign bonds in Indonesia and Malaysia, where monetary policies are accommodative, and hopes to be among first foreign financial institutions granted direct access to China’s interbank bond market.
  • “We are overweight in Indonesia and Malaysia bonds which offer attractive carry and potential for further price appreciation,” fixed income portfolio manager Neal Capecci says in interview
    • “I’m not comfortable buying local bonds in Korea and Taiwan, where yields are low and risk-rewards aren’t that great”
  • Malaysia
    • Govt bond yields are attractive on a relative basis to sovereign credit rating, also given BNM’s surprise rate cut and likelihood it will keep monetary policy accommodative
    • NOTE: BNM cut overnight policy rate to 3.0% on July 13
    • Favors long end of Malaysia’s yield curve
  • Indonesia
    • Bank Indonesia will probably continue easing monetary policy to support economy after 4 rate cuts this year
    • Holds Indonesia govt bonds across the curve
  • China
    • Manulife has applied for direct access to China’s interbank bond market in addition to having QFII quota
    • “We are eagerly waiting to hear back for our application to be approved as we would like to be the first ones to utilize this method to invest onshore”
    • NOTE: PBOC said earlier this year it is opening interbank bond market to more overseas investors
    • Onshore govt bonds offer attractive yields with liquid market; traditionally exhibits low correlation to other global bond markets
    • Yuan likely to maintain slow, measured path of depreciation vs dollar
  • No reason to own Korean or Taiwan local currency bonds; 10- yr notes yield less than U.S. treasuries and the currencies are likely to weaken
  • Fed committed to normalizing monetary policy, likely to resume rate hikes
  • NOTE: Manulife Global Asia Total Return Fund has returned 8.22% this year, beating 69% of its peers, according to data compiled by Bloomberg
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
MFC CN (Manulife Financial Corp)
BGI US (Birks Group Inc)

People
Neal Capecci (Manulife Asset Management US LLC)

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UUID: 7947283

HALISTER1: INSIDE ASIA: Yuan Rallies As PBOC Shows Willingness to Defend

INSIDE ASIA: Yuan Rallies As PBOC Shows Willingness to Defend

(Bloomberg) -- Yuan bucks decline in regional peers after a surprisingly stronger reference rate despite dollar gains overnight, fuels speculation PBOC aims to defend the Chinese currency around 6.7000 to the USD.
  • Yuan gained as much as 0.3% to 6.6780, after PBOC strengthens yuan fixing by 0.04% to 6.6946; yuan weakened past 6.7000 vs USD in past 2 days for first time since 2010
    • Broad-based selling of USD/CNH seen after surprise yuan fix, traders in North Asia say
  • “We are likely to see a pause in depreciation of the CNY against its CFETS basket, and authorities would not want the CNY to weaken much further for now,” Fiona Lim, senior FX analyst at Maybank says
    • Today’s fixing wipes off previous impression PBOC is becoming more transparent with its fixing, says Iris Pang, senior economist of Greater China at Natixis
    • CNY fixing these few days are stronger than expected, which reflects PBOC’s intention to defend USD/CNY near the 6.7 level: RBS
    • A strong fixing rate will help deliver clear information to the market that China does not want to see a CNY depreciation, at least for now: Commerzbank
    • PBOC may be managing market expectations as speculation on yuan depreciation picked up recently, Scotiabank strategist Gao Qi says
  • Asian currencies mostly lower, led by won, peso and ringgit
    • Asian currencies drop only marginally as investors unlikely to have huge positions before Fed and BOJ meetings next week, says Masashi Murata, FX strategist at Brown Brothers Harriman
  • Australia 10-year sovereign bond yield steady at 1.921% after sliding 7 bps yesterday; same tenor bond yield in Japan drops 1 bp to -0.229
    • Aussie steady around 0.7500 after declining 1.15% yesterday
    • Australia’s June Leading index falls 0.22% m/m to 96.81
    • AMP says Aussie may build on a seven-week winning streak to surge above 80 U.S. cents this year
    • Kiwi little changed ahead of RBNZ’s brief update on its economic assessment tomorrow
  • Yen gains slightly after weakening to as low as 106.53 overnight
    • May be good to sell USD/JPY around mid-106 on reduced interest among domestic investors to buy dollars, says Naoto Ono, Tokyo-based analyst at Ueda Harlow in note today
    • IMF downplayed need for Japan to weaken its currency to boost economic growth and inflation, saying yen’s moves have been orderly and that government intervention isn’t advised
      • IMF also cuts Japan GDP forecast by 0.2% to 0.3% on yen appreciation
    • BOJ should add stimulus at its policy meeting next week and use that opportunity to correct “two big lies” about monetary policy, says Mr. Hayakawa, former chief economist at BOJ
    • Yen rally triples Fukoku’s size of funds to invest in Treasuries
  • Won drops, in line with most of its peers in region
    • North Korea says missile test of simulated strikes at ports and airfields was successful
    • SocGen is long INR/KRW 3-mo. NDF at 16.76 with target at 17.76 and a stop at 16.42
  • Ringgit falls for third day, ahead of June CPI at 12pm local; June CPI est. at 1.8% vs May’s 2.0%
    • Daiwa cuts 2016 Malaysia GDP growth forecast to 4.2% from 4.5%, according to note yday
  • Baht weakens as onshore markets reopen after two-day holiday
  • Philippines’ balance of payments surplus widened to $418m in June from $241m in May, mainly due to FX operations, data released yesterday showed
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PBCZ CH (People's Bank Of China)

People
Fiona Lim (Malayan Banking Bhd)
Iris Pang (Natixis SA)
Naoto Ono (Ueda Harlow Ltd)
Qi Gao (Bank of Nova Scotia Asia Ltd/Singapore)

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UUID: 7947283

HALISTER1: Yen Rally Triples Fukoku’s Size of Funds to Invest in Treasuries

Yen Rally Triples Fukoku’s Size of Funds to Invest in Treasuries

(Bloomberg) -- Fukoku Mutual Life Insurance has more than tripled the amount of funds designated for investment in U.S. Treasuries, thanks to windfall yen gains from currency hedges taken at the end of last fiscal year ended in March.
  • Fukoku has about 100b yen ($946m) to invest mostly in Treasuries this fiscal year, about 70b yen more than its April est., according to Takehiko Watabe, director and executive officer, and general manager of investment planning department in Tokyo
    • Fukoku manages assets of over $60b
    • It said in April it would buy 30b yen of notes abroad that are fully-hedged
  • “We received some cash in profits from our hedging positions and that needs to be invested,” Watabe said in July 19 interview in Tokyo. “Our overseas debt positions are hedged, but we can buy them unhedged at around 100 yen per dollar. Therefore, we mixed hedged and unhedged positions in June-July period.”
    • Hedging gains in the previous fiscal year means Fukoku can take some currency exposure risks, Watabe added
  • Fukoku raised hedging ratio on U.S. bond holdings to 82% in fiscal 2015 from 58% a year ago, boosting such positions at rate of about 110-120 yen per dollar
  • Expects yen to trade between 95 and 115 versus dollar this fiscal year, compared with April est. of 105-120
  • Fukoku also purchased Australian and Canadian dollar bonds on dips, although the amount is “significantly smaller” compared with U.S. notes
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283