Halister News

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(Bloomberg) -- Switzerland’s Office of the Attorney General has widened an investigation into oil-trading activities in the Republic of Congo to include “possible organizational shortcomings” at Gunvor Group that may have been “exploited” by an “ex-employee to perpetrate alleged acts of bribery of foreign officials,” Gunvor says in an emailed statement. 

• Investigation was launched in 2012, when Gunvor filed a criminal complaint alleging that it was the victim of fraud and embezzlement committed by the ex-employee
  • Complaint also included allegation of money laundering
  • Co. says “acts by the ex-employee were unknown to Gunvor, which continues to fully cooperate” with the investigation
• A second employee has also been dismissed for “inappropriate, independent activities” relating to the Republic of Congo
  • Gunvor says it also immediately reported this matter to the Swiss Attorney General’s Office and conducted an internal investigation
• A spokesman for the Swiss Attorney General’s Office did not immediately respond to a phone call and email seeking comment
• Gunvor says it ceased all business in the Republic of Congo, which accounted for less than 1% of oil-trading volumes
• Gunvor says it has taken steps to strengthen compliance controls, establishing clear policies for anti-bribery and corruption, anti-money laundering, market conduct, market abuse and economic sanctions 
• READ: Gunvor statement on investigation from July 3, 2012

--With assistance from Hugo Miller. To contact the reporter on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Rachel Graham

(Bloomberg) -- Given the short debt-limit suspension, unlikely to see the “significant cheapening” of Treasury bills and 2Y notes vs OIS that was previously expected, Credit Suisse strategists led by Praveen Korapaty say in note. 

• Under a three-month suspension, Treasury not expected to raise its cash balances “much beyond” $100b-$150b by Dec. 9; bill issuance likely to be $70b-$120b in 4Q, “significantly lower” than the ~$400b assumed for a much longer suspension period
• “Interesting consequence” of shift in debt-limit dates is that excess reserve balances at the Fed may see “far less severe” decline over next six months than originally projected; as a result, “much of the tightness priced into funding markets needs to be unwound”
• Short-term debt-limit suspension and continuing resolution “likely to muddy the legislative calendar over the next few months” and complicate tax reform efforts, as any of these issues “will likely become entangled with the budget process in December”

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) -- Given the short debt-limit suspension, unlikely to see the “significant cheapening” of Treasury bills and 2Y notes vs OIS that was previously expected, Credit Suisse strategists led by Praveen Korapaty say in note. 

• Under a three-month suspension, Treasury not expected to raise its cash balances “much beyond” $100b-$150b by Dec. 9; bill issuance likely to be $70b-$120b in 4Q, “significantly lower” than the ~$400b assumed for a much longer suspension period
• “Interesting consequence” of shift in debt-limit dates is that excess reserve balances at the Fed may see “far less severe” decline over next six months than originally projected; as a result, “much of the tightness priced into funding markets needs to be unwound”
• Short-term debt-limit suspension and continuing resolution “likely to muddy the legislative calendar over the next few months” and complicate tax reform efforts, as any of these issues “will likely become entangled with the budget process in December”

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) -- Given the short debt-limit suspension, unlikely to see the “significant cheapening” of Treasury bills and 2Y notes vs OIS that was previously expected, Credit Suisse strategists led by Praveen Korapaty say in note. 

• Under a three-month suspension, Treasury not expected to raise its cash balances “much beyond” $100b-$150b by Dec. 9; bill issuance likely to be $70b-$120b in 4Q, “significantly lower” than the ~$400b assumed for a much longer suspension period
• “Interesting consequence” of shift in debt-limit dates is that excess reserve balances at the Fed may see “far less severe” decline over next six months than originally projected; as a result, “much of the tightness priced into funding markets needs to be unwound”
• Short-term debt-limit suspension and continuing resolution “likely to muddy the legislative calendar over the next few months” and complicate tax reform efforts, as any of these issues “will likely become entangled with the budget process in December”

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) -- The global demand for yield still exists but until something changes structurally in economies or central banks are able to reduce their balance sheets, it will be difficult for bond yields to rise significantly, Tom Tucci, CIBC’s head of U.S. Treasury trading, said in an interview with Bloomberg Radio.

• Doesn’t expect Fed to raise rates again this year; economic data will likely be "fuzzy enough" because of hurricane-related activity that will sour readings
• Fed would likely be "better off focused on the balance sheet"
• ALSO: Hurricanes May Slash U.S. Q3 GDP to 2% While Boosting Q4: CIBC

To contact the reporter on this story: Alexandria Arnold in Seattle at abaca3@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

(Bloomberg) -- The suspension of the debt limit for only three months raises the risk that Treasury will wait until February to begin lifting coupon auction sizes as part of its steps to make up for lost funding from the Fed’s intent to wind down its balance sheet, JPM strategists led by Jay Barry said in a note.

• Given debt-ceiling only temporary fix, Treasury likely now only to ramp up bill supply enough to bring cash balance to about $195b by year-end, under its prior target of $360b
• JPM’s previous forecast for Treasury to begin increasing coupon auctions sizes for all nominal notes and bonds at its November refunding may ”get pushed back to the February announcement”

To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang