HALISTER: Barclays Hires Evercore’s Main, Adding Another JPMorgan Veteran

Barclays Hires Evercore’s Main, Adding Another JPMorgan Veteran

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
JPM US (JPMorgan Chase & Co)
EVR US (Evercore Partners Inc)
BARC LN (Barclays PLC)

People
James Staley (Barclays PLC)
Cs Venkatakrishnan (Barclays PLC)
John Miller (Barclays PLC)
Lee Einbinder (Barclays PLC)
Paul Compton (Barclays PLC)

Topics
Who's News - People
Management Changes

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UUID: 7947283

HALISTER1: Brexit Risks Underestimated in Many Markets, Morgan Stanley Says

Brexit Risks Underestimated in Many Markets, Morgan Stanley Says

(Bloomberg) -- Many assets including EUR volatility reflect less risk premium than is warranted ahead of the vote on EU membership on June 23, Morgan Stanley analysts including Jacob Nell and Sheena Shah write in client note.
  • EUR, GBP the most effective and liquid hedges for referendum risk; EUR volatility hasn’t risen much for EUR, making EUR/USD volatility attractive
  • Favor U.S. stocks vs Europe; see a 10% to 20% correction on a leave vote and a mid single digit rally on a remain
  • Expect iTraxx Senior Financials and Crossover to be volatile around the vote and calculate the former could widen to around 400bps in a leave scenario, while the Senior Fins index may push through the 130bps-140bps level reached earlier in the year
  • Recommend buying 5Y UKT outright into Brexit; recommends buying Jan. 2021 gilt
    • No longer suggest owning gilts vs Treasuries
  • MS put the odds of a vote to leave at 30% while only 5% of investors at the MS equity conference last week expected such an outcome
  • NOTE: Brexit risk priced by GBP/USD vol is extreme compared to any other market, BofAML said last week
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jacob Nell (Morgan Stanley)
Sheena Shah (Morgan Stanley)

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UUID: 7947283

HALISTER1: Treasuries Remain Higher; 10Y Yield 1.625%

Treasuries Remain Higher; 10Y Yield 1.625%

(Bloomberg) -- Benchmark yields lower by 2bp-3bp, with 5Y below closing levels since 1Q 2015 as 10Y yields of Japan and U.K. fell to record lows and global equities dropped.
  • UST 5Y yield fell as much as 3.6bp to 1.131%, lowest since Feb. 10
  • UST 10Y yield declined as much as 2.9bp to 1.611%; YTD low was 1.529% on Feb. 11
    • “Looks poised” to move below 1.60%, with the Feb. 11 low “acting as a magnet,” independent strategist Marty Mitchell said in note
  • Analysts mostly bullish on USD rates given the global bond rally, U.K. EU referendum risks and poor economic data, though JPM recommends selling 5Y (see UST MORNING CALL)
  • Themes “are consistent” with “global growth headwinds, central banks biased for further easing, benign inflation, and of course, the risk of real economic and financial market disruptions from the British referendum on the EU,” CRT strategist David Ader said in note
  • TIPS extending last week’s underperformance of nominal USTs as WTI crude retreats further from Wed.’s YTD high close; breakeven rates (mkt-based inflation expectations) narrowed by 1.5bp-3bp for most issues, 10Y and 30Y breakevens to lowest levels since mid-March
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
David Ader (CRT Capital Group LLC)
Marty Mitchell (The Mitchell Market Report LLC)

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UUID: 7947283