HALISTER1: Brazil Political Risk Limited, as Temer Untouched: Tendencias

Brazil Political Risk Limited, as Temer Untouched: Tendencias

(Bloomberg) -- While negative political headlines weigh on BRL, significant risks will only emerge if acting President Temer, so far untouched by allegations, is implicated, Rafael Cortez, political analyst at Tendencias Consultoria Integrada, says in a phone interview.
  • “The same way the market optimism ahead of Rousseff impeachment vote was overdone, now there might be excessive skepticism about political uncertainties”
  • Risks represented by ongoing Carwash prove were expected
    • Should Senate leader Renan Calheiros be forced to step down, the most likely outcome of final vote on impeachment would still be negative for Rousseff
    • Still, an ouster of Calheiros would delay the process
  • Tendencias sees only 20% chance of Rousseff regaining power
  • Only Lula, of the Workers’ Party, and Marina Silva, from Rede, are currently interested in new elections; other major political parties lack candidates who could win presidency now
  • Govt measure to limit public spending is likely to be approved; more ambitious pension reform vote may take more time
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Luiz Inacio Da Silva (Federative Republic of Brazil)
Marina Silva (State of Acre/Brazil)
Michel Temer (Federative Republic of Brazil)
Rafael Cortez (Tendencias Consultoria Integra)
Renan Calheiros (Federative Republic of Brazil)

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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 May seen at 95.4 vs preliminary 95.8 (forecast range 93 to 96.5); based on random sample of households.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
8810Z US (University of Michigan)

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UUID: 7947283

HALISTER1: Enter Gilt 5s20s Flattener After Similar EUR, UST Trades: BofAML

Enter Gilt 5s20s Flattener After Similar EUR, UST Trades: BofAML

(Bloomberg) -- After favoring flatteners in EUR and U.S. curves, BofAML now recommends 5s20s gilt flatteners, strategists including Mark Capleton write in client note.
  • Flattening is a global theme, with the longer end supported by scarcity of positive-yielding, safer assets in bond markets
  • “Remain” vote in U.K.’s EU referendum looking increasingly likely according to polls; should also benefit the trade
  • DMO has front-loaded issuance, leaving almost a third of net supply in 15Y+ completed just two months into fiscal year
  • Coupon payments from long-end in June, July will see GBP3.5b repaid to private holders
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Mark Capleton (Merrill Lynch International)

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UUID: 7947283