HALISTER1: Nordea Reported to Danish Police After FSA Faults AML Compliance

Nordea Reported to Danish Police After FSA Faults AML Compliance

(Bloomberg) -- Danish FSA investigation into Nordea Bank Danmark’s compliance with anti-money laundering rules has been handed over to police for further handling and possible sanctions, bank says
  • CEO Casper von Koskull says in statement that deficiencies are “unacceptable” and “becoming compliant is an absolute top priority for Nordea”
  • Bank “initially underestimated the complexity and the time it takes to change our procedures,” he says
  • Danish FSA investigated last year Nordea Bank Danmark’s compliance; FSA findings related to Nordea’s “earlier reported deficiencies,” banks says
  • Compliance area is to grow; unit has 850 full-time employees focusing on these tasks “with the aim to be around 1,150 by the end of this year” and “is expected to grow even further”
Link to Statement:Link
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
NDA SS (Nordea Bank AB)

People
Casper Von Koskull (Nordea Bank AB)

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UUID: 7947283

HALISTER1: INSIDE TAIWAN: Govt Bonds Fall as Risk Aversion Eases, TWD Gains

INSIDE TAIWAN: Govt Bonds Fall as Risk Aversion Eases, TWD Gains

(Bloomberg) -- Yield of Taiwan govt bonds advance as risk aversion from U.K.’s referendum eases slightly ahead of the weekend; TWD gains, supported by foreign fund inflows.
  • Yield of 10-yr Taiwan govt bond rises 1.66 bp today to close at 0.7866%, highest since June 8
  • Local bond yield bounces back, following U.S. Treasury yield recovery, as chances for U.K. to leave EU declines after the murder of pro-remain U.K. lawmaker ahead of Brexit referendum, says Kevin Chan, fixed income trader at SinonPac Securities
    • Still positive on bonds as upside for yield is capped with delayed Fed hike
    • Expects yield of 10-yr note to trade within 0.77% to 0.81% before Brexit vote on June 23; yield of 5-yr to fluctuate within 0.53% to 0.57%
  • Yield on 5-yr govt bond rises 0.8 bp to close at 0.5410% on when-issued trading
  • TWD rises 0.02% to close at 32.385 vs dollar, also the strongest closing price since June 8
  • TWD supported by equity inflows in June, but continue to see USD/TWD upside, say Standard Chartered senior economist Tony Phoon and Asia FX strategist Eddie Cheung in a note today
    • CBC to lower benchmark rediscount rate by 12.5bps to 1.375% on 30 June; to be tolerant of TWD weakness as local fundamental disappointing
    • Seasonal dividend repatriation in August to support USD/TWD; maintains USD/TWD yr-end target at 33
  • Overseas investors net buy NT$5.89b ($181.82m) local stocks today
  • USD/TWD forwards second-most active on DTCC
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Eddie Cheung (Standard Chartered PLC)
Kevin Chan (SinoPac Securities Corp)
Phoo Meng (Standard Chartered PLC)

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HALISTER: Spanish Bank’s Trip From Most Profitable to Capital Deprived (1)

Spanish Bank’s Trip From Most Profitable to Capital Deprived (1)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
POP SM (Banco Popular Espanol SA)

People
Angel Ron Guimil (Banco Popular Espanol SA)
Federico Montero (Cushman & Wakefield Llp)
Fernando De Acuna Martinez (Rr De Acuna Y Asociados)
Jaume Puig (Gvc Gaesco Valores Sv SA)
Jose Iturriaga (Abante Asesores SA)

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UUID: 7947283

HALISTER1: Tactical EUR Conditional 10s20s ‘Bremain’ Flattener: Commerzbank

Tactical EUR Conditional 10s20s ‘Bremain’ Flattener: Commerzbank

(Bloomberg) -- Probable skewness of EUR IRS moves in the aftermath of the Brexit referendum argues for a conditional set-up to capitalize on a bearish kneejerk reaction led by 10y IRS, Commerzbank strategist Markus Koch writes in client note.
  • Buy EUR 1m10y ATM payers vs EUR 1m20y OTM payers at zero cost
  • 10s20s is still trading more than one sigma wide relative to fair value, thereby largely limiting risks of a still steeper curve while fast money will unwind respective hedges in the 10s instantaneously
  • On expiry, the spread should trade up to 15bp tighter, led by the 10y tail
  • Steep curve in the gamma grid renders the sale of vol in long vs short tails fairly attractive
  • Risk: curve could also bear steepen judging by historical patterns, hence resulting in a loss if the cushion from the vol intake is exceeded
  • Conversely, the zero-cost payer position would expire worthless in case of a Brexit, driving EUR IRS to still lower levels
  • In sum, investors are limiting the downside to PnL while fully capitalizing on a Bremain outcome
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Markus Koch (Commerzbank AG)

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UUID: 7947283

HALISTER1: JAPAN RATES WEEKLY: JGB Yields Hit Record Lows on Brexit Risks

JAPAN RATES WEEKLY: JGB Yields Hit Record Lows on Brexit Risks

(Bloomberg) -- Japan’s sovereign bond curve flattens as yields for 5-, 10-, 20-, 30- and 40-year debt reach record lows, tracking global bond rally on haven demand ahead of U.K’s Brexit vote and after dovish tone at FOMC meeting.
  • Click here for weekly change in yield curve and here for market snapshot
  • Yields at record lows were 5-year at -0.305%, 10-year at -0.210%, 20-year at 0.090%, 30-year at 0.150% on June 16 and 40-year at 0.195% on June 17
  • BOJ maintained monetary policy on June 16; voted 8-1 to keep monetary base target unchanged, 8-1 to hold asset-purchase program, and 7-2 to maintain negative rate policy
  • Governor Kuroda said at press conference after BOJ meeting that the central bank won’t hesitate to add stimulus if necessary, and he’s still expecting inflation to reach a 2% target in fiscal 2017; adds BOJ is in close contact with other central banks including Bank of England over the U.K. referendum
  • Yen surged to 103.55 against dollar, highest since August 2014 after BOJ maintained monetary policy on Thursday
  • Combined holdings of international investors and BOJ in Japanese T-bills increased to 88.4% in 1Q, the highest proportion ever and up from 83.3% in 4Q, according to BOJ’s Flow of Funds data on June 17
  • BOJ board member Kiuchi speaks on June 23 and BOJ Deputy Governor Nakaso speaks on June 24
  • Govt to hold enhanced-liquidity auction on June 21 and to sell 3-mo. bills and 20-year bonds on June 23
  • JGBs worth about 18t yen ($173b) will mature this month (excluding T-bills, linkers and floating bond), with large proportion June 20, according to data compiled by Bloomberg
  • WHAT THEY SAY
  • Barclays (Naoya Oshikubo, rates strategist)
    • There is some correction from bull-flattening that seems to be overdone, while improving risk sentiment overnight, which helped recovery of stocks in Asia, is also supporting such moves today
    • It will probably be hard for investors to take any significant positions before U.K. vote on June 23
    • There will be large amount of bonds maturing in the next few days, which is improving demand/supply conditions in the market
  • MassMutual Life Insurance (Satoshi Shimamura, head of rates and markets at investment strategy department)
    • JGBs are likely to be well supported across the board before the U.K. referendum
    • Dovish Fed and lingering speculation of further monetary easing by BOJ as well as expected demand from investors whose bonds will mature early next week are supporting the JGBs
    • However, uncertainties about the 20-year note auction on June 23 may steepen the curve of super-long sectors
  • Sumitomo Mitsui Asset Management (Jun Fukashiro, senior fund manager)
    • Investors are unlikely to aggressively bid in 20-year note auction at expensive prices, given recent overheating market condition
    • However, there still seems to be solid demand for debt at reasonable prices, and therefore, auction is likely to go smooth
    • JGB yields will return to stay under trend of gradual declines
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jun Fukashiro (Sumitomo Mitsui Asset Management Co Ltd)
Naoya Oshikubo (Barclays PLC)
Satoshi Shimamura (Massachusetts Mutual Life Insurance Co)

Topics
BFW Japan Rates Analyst Wrap

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HALISTER: Allianz Sees Pimco Hiring in Pivot From Bill Gross’s Former Fund

Allianz Sees Pimco Hiring in Pivot From Bill Gross’s Former Fund

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
21429Z US (Pacific Investment Management Co LLC)
ALV GR (Allianz SE)
PTTRX US (PIMCO Total Return Fund)

People
Bill Gross (Pacific Investment Management Co LLC)
William Gross (Janus Capital Management LLC)
Axel Theis (Allianz SE)

Topics
Who's News - People

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UUID: 7947283

HALISTER1: Korean Won, Taiwan Dollar, Ringgit Forwards Most Active on DTCC

Korean Won, Taiwan Dollar, Ringgit Forwards Most Active on DTCC

(Bloomberg) -- USD/KRW non-deliverable forwards account for 25.0% of total volume today, according to trades reported to DTCC; USD/TWD second-most active at 16.0%, USD/MYR third at 14.6%.
  • Total volume was $5.76b as of 3:18pm HKT; global total yday was $44.7b, with USD/BRL accounting for 19.4%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Negative Yields; 1MDB Confident, HSBC Charge

EU CREDIT DAILY: Negative Yields; 1MDB Confident, HSBC Charge

(Bloomberg) -- EUR credit mkt facing a delicate balancing act between finding yield and preserving capital amid negative yield environment; a task made all the more challenging by an anemic macroeconomic backdrop and latest geopolitical uncertainty, Bloomberg strategist Simon Ballard writes.
  • Corp bonds, with added support of ECB CSPP, remain the asset class of choice for many investors, but with an understandable up in quality bias
    • Asian credit mkts regaining some composure overnight suggest a firm, but low volume, end to the week for EUR risk assets
  • EU referendum campaigning in U.K. suspended following MP’s murder Thursday, but Brexit likely to remain key driver of mkt sentiment and volatility in run up to vote on June 23
  • CDX IG closed -2.3bps at 82.85 in overnight session; iTraxx Asia Ex Japan IG currently -2.8bps at 147.59
NEWS
  • Corporate News
  • 1MDB Confident of Legal Position in Debt Dispute With Abu Dhabi
  • Tesco Agrees to Sell Dobbies Garden Centres for GBP217m Cash
  • Ford Says Building Most Popular SUVs For Extra Week This Summer
  • BMW Asia Says Vietnam Is a Top Growth Market as Economy Expands
  • Smith & Wesson Jumps as Outlook Tops Estimates on Gun Demand
  • Financial News
  • HSBC Says Unit to Book $585 Million Charge on Settlement
  • Bankinter to Distribute First Dividend Against 2016 Earnings
  • Fortum Signs EU1.75b 5Y Revolving Credit Facility From 17 Banks
  • Pimco Cuts Jobs After Decline in Assets Since Gross’s Exit
  • Credit Rating News
  • Yen May Climb as Japan Faces Another Lost Decade, Says Moody’s
  • Fitch: Australian Bank Capital Ratios Understate True Position
  • KNOC ratings unaffected by govt’s restructuring plan: Moody’s
  • Pakistan Political Instability Credit Negative at Moody’s
  • Fitch Places Crown Resorts on RWN Following Proposed Demerger
  • Other News
  • Chinese Bonds Poised for Biggest Weekly Advance in Five Months
  • End Is Nigh for Japan Yield as Investors Chase 40-Year Toward 0%
ANALYST VIEWS
  • We are all going to be adding greater levels of risk as we search for ever riskier, higher yielding assets. The corporate bond market (corporate borrowers, short-term performance) is a beneficiary in this case: creditmarketdaily.com
NEW ISSUES
  • Eutelsat EU500m 5Y MS +120
  • Salini Impregilo EU300m 5NCL Notes 3.75%
  • Cott Finance EU450m 8NC3 Senior Notes 5.50%
  • European IG credit pipeline here and HY credit pipeline here
  • Issuers exposed to S-T rollover and interest-rate reset risk here
  • NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
HSBA LN (HSBC Holdings PLC)

People
William Gross (Janus Capital Management LLC)

Topics
Leveraged Finance

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UUID: 7947283