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Reuters - #Brazil probes alleged money laundering on sales to Venezuela's #PDVSA reuters.com/article/us-bra...
Original Tweet content Reuters- #Brazil probes alleged money laundering on sales to Venezuela's #PDVSA reuters.com/article/us-bra…
Marianna Párraga @mariannaparraga
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Twitter profile information as of September 11, 2017 Description: Venezuelan. Energy correspondent in Houston. Troubled mom of three/ Periodista de petróleo. Mamá de tres. Autora del libro Oro Rojo. Mis opiniones son miítas Tweets: 14,831  Following: 2,617  Followers: 12,383  Tweeting Since: 11/25/2009

--GREG SULLIVAN

(Bloomberg) -- Forecast for new debt-ceiling x-date based on “highly uncertain tax flows” in early 2018 and the fact that Congress “likely will not want to play with fire,” Deutsche Bank strategist Steven Zeng said in Sept. 8 note. 

• Treasury may not need to use extraordinary measures within the first two months of the reinstatement as cash receipts tend to exceed deficit spending
• Between tax-refund season of Jan. 25 to April 15, Treasury may use as much as ~$400b of cash, boosting deficit by an est. $280b from the Dec. 9 debt-limit reinstatement; would be “dangerously close” to Treasury’s total headroom, projected at roughly $305b, including $270b-$250b in extraordinary measures
• Short-term debt-ceiling deal means year- end liquidity withdrawal may be milder than if the suspension started in October, because the seasonal ramp up in bill issuance should be slower; Treasury may opt to keep its cash balance around $150b-$200b for “easier operational management” come December, which implies smaller bill issuance
• Assuming the debt limit is reinstated Dec. 9 and Treasury resorts to extraordinary measures, increases in bill supply may be smaller due to quarterly tax payments; 4Q net bill supply est. $150b, assuming Congress doesn’t address the debt ceiling before year- end

To contact the reporter on this story: Alexandra Harris in New York at aharris48@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

(Bloomberg) -- BCB’s minutes from last week’s policy meeting expected to reinforce message from post-decision statement, which hinted at a "moderate reduction" of easing pace for next encounter in October and also signaled that cycle will be gradually closed, while analysts will be looking for signs on the "arrival point" of the terminal Selic rate.

• Possible introduction of discussion on how long Brazil’s central bank will be able to keep rates below neutral interest will also be monitored by investors, although clarification on these two points more likely to come in the Quarterly Inflation Report, to be released at the end of September, analysts say
• Minutes may bring more clues regarding the gradual closure of easing cycle, says Marcelo Cirne de Toledo, chief economist at Bradesco Asset Management
• Minutes should strengthen the signal of moderate reduction in easing pace for the next Copom meeting and the fact that cycle is now at a more advanced stage, says Jankiel Santos, chief economist at Haitong
• Marco Antonio Caruso, economist at Banco Pine, says both BCB’s projections for inflation in the end of 2017 and 2018 are quite high compared to Pine’s forecast and, if this is true, he will be looking to understand if the terminal Selic rate could go below 7%
• "Given that Copom revealed preference for reaching an accommodative monetary stance due to the current macro backdrop, we will be looking at the minutes for any discussion about the time-horizon to then bring rates back to neutrality", Goldman Sachs says in a report signed by Alberto Ramos and Paulo Mateus
• NOTE: Brazil Cuts Key Rate to 8.25%, Hints at Slower Easing Ahead

--With assistance from Josue Leonel and Ana Carolina Siedschlag. To contact the translator on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net To contact the translation editor responsible for this story: Ney Hayashi at ncruz4@bloomberg.net Reporters on the original story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net; Patricia Lara in Sao Paulo at plara6@bloomberg.net Editors responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net Marisa Castellani

(Bloomberg) -- Near-term positioning views on USTs are broadly bearish, based on factors including Fed rate-hike odds higher than what market is pricing in, potential for inflation to stabilize, and prospect of increased auction sizes.

• Deutsche Bank (strategists led by Stuart Sparks, Sept. 8 note)
  • Current market pricing rests on the “unlikely” presumption “that inflation is stuck well below target for the foreseeable future”
  • That makes August PPI and CPI releases this week “even more important” than normal
  • For rates to decline from current levels, market needs to begin to price in rate cuts, or to compress term premium back to 2016 lows, unlikely with ECB poised to trim asset purchases
  • DB recommends modestly increasing bearish risk via paid position in 3y1y-2y1y forward rate spread
• JPMorgan (strategists led by Jay Barry, Sept. 9 note)
  • Declining odds of a technical default on USTs “suggests there is room for Treasuries to cheapen over the near term,” based on previous experience
  • Also, JPM expects core CPI increase of 0.16% in August, a result that “will keep the door open” for a December Fed rate increase
  • Position indicators “are skewed toward modestly higher yields”
  • JPM remains bearish on front-end duration, recommends maintaining shorts in 2Y sector
• NatWest Markets (strategists led by John Briggs, Sept. 8 note)
  • Based on lifting of near-term concerns about debt ceiling and government funding, switches from bullish stance on U.S. rates to expecting “bearish correction back to the upper end of the yield range,” 2.25%-2.3% for UST 10Y
  • However amid “substantial risks” including FOMC meeting, hurricanes and North Korea, prefers curve expression to outright shorts; paying 5s on 2s5s10s fly also should benefit from “any reintroduction of long term Fed pricing”
• Nomura (strategists led by George Goncalves, Sept. 8 note)
  • UST 10Y yield has scope for 15bp-20bp selloff into Fed balance sheet unwind, as market remains rich vs Nomura fair value estimates
  • Analysis assumes that Fed board’s new members may want to proceed slowly with any rate hikes, delaying action until June 2018, and that recent hurricanes will “lead to noisy job and inflation data” that also may delay Fed’s decisions
• TD (strategists led by Priya Misra, Sept. 8 note)
  • Modest rise in rates likely over coming months as “a lot of bad news is priced in,” debt ceiling won’t be a factor until February at the earliest, economy is growing fast enough for Fed to hike gradually, and supply pressure is likely as Treasury increases auction sizes in November refunding
  • TD recommends short duration position via 3m15y payer spreads
• Barclays (strategists led by Rajiv Setia, Sept. 7 note)
  • Continues to recommend 2s10s flatteners as Fed “would like to keep the option of hiking once more alive”
  • Long-dated yields “do not look low in the context of low neutral rates,” despite having rallied
• Citi (strategist Jason Williams, in Sept. 7 note)
  • Stage is set for “a mild selloff in rates” based on agreement to suspend U.S. debt ceiling until December; MORE

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Elizabeth Stanton