HALISTER1: Brazil Outperforms, But May Also See Delayed Reaction: Analysts

Brazil Outperforms, But May Also See Delayed Reaction: Analysts

(Bloomberg) -- While early impact of Brexit on Brazil assets such as BRL has been smaller compared to EM peers, total reaction will depends on further developments on Europe and globally, analysts say.
  • NOTE: BRL -0.9% vs USD as ZAR drops 3.40%, MXN -2.9%
  • Brazil’s direct links, in trade and investments, with U.K. are small relative to others, but the impact on global risk may hurt high-yielding currencies by “varying degrees”, Mike Moran, head of economic research for the Americas at Standard Chartered says in an e-mailed interview
    • “The market is still digesting the implications of this Brexit vote and the focus naturally has been more European-centric so far; it may take some time before the implications for Brazil are digested”
  • Biggest risk for markets is if other countries follow U.K. example and decide to leave the EU, Pablo Spyer, director at Mirae Asset Wealth Management, says in a phone interview
    • Positive development for BRL and other EM markets is the deep decrease of bets on U.S. rate hikes
    • “The markets scrapped the bets on hikes this year and maybe we won’t see any hike in the next 12 months”
    • While recent wins of acting president Temer on votes in Congress adds to BRL’s resilience, eco.-political backdrop is still not totally stabilized, Spyer says
  • NOTE: Only 1,5% of all Brazil exports go to U.K.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Michel Temer (Federative Republic of Brazil)
Mike Moran (Standard Chartered PLC)
Pablo Spyer (Mirae Asset Global Investments)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: University of Michigan Due in 5 Minutes

U.S. ECO PREVIEW: University of Michigan Due in 5 Minutes

(Bloomberg) -- University of Michigan final consumer sentiment index for June seen at 94.1 vs preliminary 94.3 (forecast range 92 to 95.5); based on random sample of households.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
8810Z US (University of Michigan)

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HALISTER1: Next Fed Rate Hike Now Seen in Dec., Not Sept., BofAML Says

Next Fed Rate Hike Now Seen in Dec., Not Sept., BofAML Says

(Bloomberg) -- “The Fed will likely delay the hiking cycle,” as Brexit will reduce U.S. GDP growth by an est. 0.2ppts over next 6 qtrs, BofAML economists led by Ethan Harris write in note Fri.
  • Outcome of Brexit vote “is another in a long string of confidence shocks,” hits an “already vulnerable” U.S. and global economy
  • Drag to U.S. GDP will show up as early as next qtr; this leaves 2016 annual growth at 1.8%; slices 0.2ppts from growth next yr, bringing it also to 1.8%
  • Fed will delay next hike until Dec., followed by 2 more hikes next yr in June and Dec.; BofAML is “simply pushing out our forecast trajectory by a quarter”
  • Change in forecast depends “critically” on extent of slowdown in European growth, size of confidence shock and move in USD
    • Given high degree of uncertainty, “we will be nimble” in adjusting forecasts as needed
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ethan Harris (Bank of America Corp)

Topics
BGOV Finance

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HALISTER1: Business Insider: Boeing's $25 billion historic deal with Iran rests on shaky foundations

Business Insider: Boeing's $25 billion historic deal with Iran rests on shaky foundations

Alert: HALISTER1
Source: BLG (Blogs Web Content)

Tickers
BA US (Boeing Co/The)

People
Barack Obama (United States of America)
John Kerry (United States Department of State)
John Kirby (United States Bureau of Public Affairs)

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UUID: 7947283

HALISTER: Morgan Stanley Said to Start Moving 2,000 Staff Out of U.K.: BBC

Morgan Stanley Said to Start Moving 2,000 Staff Out of U.K.: BBC

(Bloomberg) -- Morgan Stanley has begun process of moving 2,000 London based investment banking staff, BBC reports on website and in tweet, citing unidentified people familiar.
  • Staff said to be moved to Frankfurt or Dublin
  • Task force in place
  • Moved jobs would be in euro clearing, other investment banking functions, senior management
  • NOTE: June 22, Morgan Stanley Eyes Dublin, Frankfurt for Post-Brexit HQ
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
MS US (Morgan Stanley)

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UUID: 7947283