HALISTER1: UST MORNING CALL: De-Risking for Payrolls; Brexit Impact on Data

UST MORNING CALL: De-Risking for Payrolls; Brexit Impact on Data

(Bloomberg) -- Bias toward de-risking ahead of Friday’s employment report; data may look slightly better given it is from pre-Brexit vote.
  • Seaport Global, which favored 5s30s flattener since spread was ~135/136bps, is looking to take off risk ahead of this week’s payroll reports after spread touched 119bps overnight, Managing Director Tom Digaloma writes in a client note
  • All data that comes this week is from before EU referendum, and there may be a disconnect between pre- and post- Brexit data, RBS writes in a client note; tempted to try and take advantage of this via tactical shorts this week
  • ISM survey on Brexit released Friday shows “most” don’t foresee major disruptions, while “many are cautiously watching the situation”; expects Brexit to hamper growth
  • Analysts maintain a bullish bias on USD rates; Deutsche Bank, Citi lower yield forecasts following move from BofAML last week; Goldman still sees “two-thirds” probability of at least one Fed hike by year-end: MORE
  • Technicals:
    • Resistance: 133-29 (July 1 high), 134-07 (June 24 high)
    • Support: 133-00 (July 4 low), 132-14+ (50% of June 24 range), 131-01 (61.8% Fibonacci retracement of June 24 range)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Tom Di Galoma (Seaport Group LLC/The)

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UUID: 7947283

HALISTER: Apple FY3Q, FY4Q Ests. Cut at Citi on Brexit Uncertainty, FX

Apple FY3Q, FY4Q Ests. Cut at Citi on Brexit Uncertainty, FX

(Bloomberg) -- Apple FY3Q, FY4Q ests. cut by Citi analyst Jim Suva, citing potential for lower demand due to Brexit-related macro uncertainty and currency volatility.
  • Also cites lengthening product replacement cycles (avg length has increased to ~28 mos. from ~24 months in 2013)
  • Sees FY3Q, FY4Q EPS and rev. below consensus ests.
  • Expects AAPL shares to be range bound in N-T during seasonally slow summer and ahead of iPhone 7
  • Reiterates AAPL buy rating, PT $115
  • AAPL down 0.9% pre-market
  • NOTE: Separately, Pacific Crest downgraded AAPL suppliers Cirrus Logic and Skyworks today
  • NOTE: AAPL reports FY3Q results July 26
  • NOTE: AAPL 41 buy ratings, 7 holds, 2 sells; avg. PT ~$123: Bloomberg data
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
AAPL US (Apple Inc)

People
Jim Suva (Citigroup Global Markets Inc)

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UUID: 7947283

HALISTER: Billionaire Brothers Seek Repeat of Danaher’s M&A-Fueled Ascent

Billionaire Brothers Seek Repeat of Danaher’s M&A-Fueled Ascent

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DHR US (Danaher Corp)
FTV US (Fortive Corp)

People
Mitchell Rales (Danaher Corp)
James Lico (Fortive Corp)
Jeff Windau (Edward D Jones & Co LP)
Julian Mitchell (Credit Suisse Holdings USA Inc)
Steven Rales (Danaher Corp)

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UUID: 7947283

HALISTER1: 1MDB probe poses risks for Goldman Sachs

1MDB probe poses risks for Goldman Sachs

Alert: HALISTER1
Source: FTI (Financial Times)

Tickers
0206021D MK (1Malaysia Development Bhd)
3399249Z LY (Libyan Investment Authority)

People
Dennis Kelleher (Better Markets Inc)
Mohd Abdul Razak (Federation of Malaysia)
Sally Yates (United States Department of Justice)

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UUID: 7947283

HALISTER1: *BOE CUTS U.K. COUNTERCYCLICAL-CAPITAL BUFFER TO ZERO FROM 0.5%

*BOE CUTS U.K. COUNTERCYCLICAL-CAPITAL BUFFER TO ZERO FROM 0.5%

Alert: HALISTER1
Source: BN (Bloomberg News)

Tickers
BARC LN (Barclays PLC)
HSBA LN (HSBC Holdings PLC)
LLOY LN (Lloyds Banking Group PLC)
RBS LN (Royal Bank of Scotland Group PLC)
STAN LN (Standard Chartered PLC)

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UUID: 7947283

HALISTER1: Brexit Means ECB Rates Low for Longer But Not Deep Cuts: SG

Brexit Means ECB Rates Low for Longer But Not Deep Cuts: SG

(Bloomberg) -- ECB rate cuts in excess of 10bp are unlikely given their negative side effects, and focus will remain on the necessary PSPP redesign, Societe Generale strategist Adam Kurpiel writes in client note.
  • Buy EUR 3m10y ATMF receivers, sell 3m2y ATMF receivers, PV01-weighted
  • Conditional EUR 2y10y bull-flatterers allow for fading the richness of the EUR front end with no exposure to bear- steepening
  • Risk: EUR 2y rate decreasing on the back of even more aggressive ECB rate-cut expectations with a more stable EUR 10y rate would lead to a risk of unlimited losses at expiry
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Adam Kurpiel (Societe Generale SA)

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UUID: 7947283