Halister News

(Bloomberg) -- Benchmark index for the bond portfolio should consist of nominal government bonds issued in dollars, euros and pounds, central bank Governor Oystein Olsen and NBIM CEO Yngve Slyngstad write in joint submission to the Finance Ministry published on the wealth fund’s website.

• Recommends the number of currencies in the bond index is reduced; also proposes that emerging-market bonds should now be removed from the benchmark
• Recommends that corporate bonds, inflation-linked bonds and bonds issued by international organizations are removed from the benchmark index
• Proposes setting an upper limit for maturity of around ten years for bonds included in the index
• Says proposed changes to the composition of the benchmark mean that deviation between the benchmark index and the portfolio will increase
• Doesn’t propose any changes to the investment universe; fund should continue to be allowed to be invested in all tradable debt instruments
• Says the benchmark index cannot capture all of the risks that the fund should be exposed to at any given time

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

• Daily Trend Bias: Bullish
• Comment: Gaps higher as risk-aversion fuels demand; stays bullish while above rising 13-day exponential MA (164.70); however, momentum rather lackluster with MACD nearing a downside cross
  • Resistance: 165.21; 165.29-31; 164.41; 165.52; 165.69; 165.96
  • Support: 164.83 (pivot); 164.70; 164.52-46; 164.41 (21-DMA)
• 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 To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Scott Hamilton

(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

DOWNGRADES

• Ami Estates
  • Long-term bank facilities cut to B+ from BB at Crisil
  • Cites delay in project implementation
• Nelito Systems
  • LT bank facilities cut to BBB+ from A- at Crisil
  • Cites change to more diffused holding structure
• Reliance Infrastructure
  • LT bank facilities, NCD cut to A- from A+ at Care
  • Cites delay in proposed debt reduction plan of the company

UPGRADES

• Deepak Novochem
  • LT bank facilities raised to BBB from BBB- at Care
  • Cites growth in total operating income
• ENN ENN Corp
  • Term loan raised to BBB from BBB- at India Ratings
  • Expects substantial improvement in revenue

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(Bloomberg) -- Gold volatility remains relatively anchored while call skew stays elevated, boosting the appeal of using spreads for upside exposure amid renewed focus on tail risks, given many investors remain long risk in the late-cycle environment.

• Gold continues to provide diversification for portfolios and has been the most volatile relative to havens of 10-year Treasuries and yen, see chart here
• Short-dated implied volatilities continue to trade below their 1-year medians with 50-delta 3- month GLD ETF at 11.8%, 25th percentile
• See chart here of GLD three-month 25-delta call skew, the spread between 25-delta calls and the ATM implied vols, which remains relatively steep, boding well for call spreads
• There is no alternative (TINA) is still working for stocks, given bond yields still lack strong competition vs dividend yield
• However, while stretched U.S. equity valuations don’t exhibit short-term signaling ability, longer-term return prospects have significantly diminished with the S&P 500 trading at 18.7x forward EPS, levels not seen since the tech-stock bubble
• NOTE: See example structure here from July 14 on how receiver spreads may appeal to investors looking to hedge geopolitical risks that game theory suggests will ultimately not lead to conflict, as well as the evolution of the Fed’s reaction function from rate hikes to reliance on balance- sheet reduction for policy normalization
• NOTE: Tanvir Sandhu is an interest-rate and derivatives 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: Tanvir Sandhu in London at tsandhu17@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Keith Jenkins

(Bloomberg) -- The six are suspected of financial crimes, ethical breaches, police spokeswoman says in text message, without providing further details.

• Former navy commander, former senior official in PM’s office among those being questioned, Ynet reports, without saying where it got the information 
• NOTE: PM Benjamin Netanyahu is not a suspect in the case: Haaretz
• NOTE: Feb. 27, Israel to Open Criminal Probe Into Purchase of German Submarines

To contact the reporter on this story: Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net Amy Teibel