Halister News

--CHRISTIAN WIENBERG

(Bloomberg) -- Bund futures (RX1) technical levels in focus.

• Daily Trend Bias: Neutral to bullish
• Comment: Gaps lower as appetite for risk returns; despite this, topside risks remain present and buyers could become active again at lower pivot points (162.78, 162.49); further down, 13-DMA at 162.38 should be monitored as seen as the bull defining and trailing trend support
  • Resistance: 163.10 (day’s pivot); 163.39-43; 163.71
  • Support: 162.78-73; 162.49; 162.38 (13-DMA); 162.22
• NOTE: Roll-adjusted by difference in GFUT
• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Sejul Gokal in London at sgokal1@bloomberg.net

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS, click on Display & Edit, then Set Alert Delivery

DOWNGRADE

• Arpit Projects
  • Term loan cut to D from BB at India Ratings
  • Cites delays in debt servicing

UPGRADES

• Asahi India
  • Long-term bank facilities raised to A- from BBB+ at Care
  • Cites improved operational performance
• Mayfair Hotels
  • LT bank facilities raised to BBB- from BB at Crisil
  • Cites improvement in liquidity
• P&C Projects
  • LT bank facilities raised to BBB- from BB at Care
  • Cites improvement in order book, sharp growth in revenue

(Bloomberg) -- Analysts are more positive on the ringgit as steadier oil prices, the currency’s undervaluation and an improved outlook for the Malaysian economy boost prospects for one Asia’s worst performers in the past year. The currency rallied to a 10-month high last week after the dollar slumped on increasing doubts over further Federal Reserve interest rate increases this year and amid worsening tensions with North Korea. Malayan Banking Bhd, Standard Chartered Plc and Scotiabank were among those which had highlighted the ringgit’s undervaluation in the past week and forecast further gains in the currency for the rest of the year. The trend for the ringgit remains positive despite its decline Monday due to a rebound in the dollar, said Trinh Nguyen, senior economist for emerging Asia at Natixis SA in Hong Kong. The Malaysian currency fell 0.1% to 4.1993 per dollar as of 10:41am local time after touching 4.1825 Friday, the strongest since November 2016. Following are views from analysts:

• Hong Leong Investment Bank (Sia Ket Ee and Felicia Ling, analysts in Kuala Lumpur)
  • Raises forecast for MYR to 4.10-4.25 per USD for rest of the year from previous target of 4.30-4.40
  • Expects MYR to rise further toward 3.90-4.10 in 2018
  • Turning mildly positive on MYR amid weaker USD, firmer oil prices, lower foreign holdings of maturing Malaysian debt and higher export proceeds conversion
  • Downside risks to forecast are hawkish Fed and geopolitical tensions from North Korea that culminate in an outbreak of war
• Malayan Banking (analysts led by Saktiandi Supaat in Singapore)
  • Ringgit is fundamentally undervalued by about 11%
  • Fair value for USD/MYR is seen at 3.80
  • Stability is gradually returning to MYR as political and contingent liability risks subside, fiscal consolidation gains traction and oil prices continue to stabilize
• Scotiabank (strategist Qi Gao in Singapore)
  • Despite its gains late last week, MYR remains undervalued whether in terms of nominal effective exchange rate or real effective exchange rate
  • Expects USD/MYR to head for 4.00 in the coming months
• United Overseas Bank (FX strategist Peter Chia in Singapore)
  • MYR’s rally is a replay of its gains in late April when what started as a technical breakout was later fueled by fundamentals
  • Stronger- than-expected exports in July are likely to translate into more conversions into MYR by exporters
• Standard Chartered (strategist Divya Devesh in Singapore)
  • Recommends selling USD/MYR via 3-month onshore deliverable forwards with spot target of 4.00 and stop- loss of 4.23
  • MYR remains among the most undervalued EM FX
  • Real effective exchange rate is well below historical average and still close to 1997 levels
  • Foreign investors’ overall positioning remains extremely light in the historical context and MYR sentiment onshore has improved with better USD supply dynamics

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

(Bloomberg) -- U.S. Treasuries may extend their decline as the North Korean tensions look set to abate further while the U.S. economy remains resilient, says Hideki Shibata, senior rates and currencies strategist at Tokai Tokyo Research Center.

• Lack of missile action from North Korea on Saturday prompts investors to unwind their risk-off positions this morning, says Tokyo-based Shibata
  • It’s unlikely that U.S.-proposed sanctions against North Korea will be adopted straight away given Russia’s possible resistance
  • UN resolution could be postponed, and a delay would lead to a less tough sanction, which limits reaction from North Korea and eases risk-off sentiment
• With U.S. economy remaining resilient and Fed on course for monetary policy normalization, a big drop in Treasury 10-year yield below 2% is unlikely as long as there’s no military conflict on Korean peninsula
• A moderate increase in U.S. yields can be expected over medium to long term
• NOTE: Treasuries cheapen across the curve, with 10-year yield up 4bps to 2.09% after dropping to as low as 2.01% Friday
• NOTE: U.S. calls for a vote on Monday on a draft resolution to tighten sanctions on North Korea

To contact the reporter on this story: Masaki Kondo in Singapore at mkondo3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui