HALISTER: German Plan to Question Fiat on Emissions Hits Italian Roadblock

German Plan to Question Fiat on Emissions Hits Italian Roadblock

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
FCAU US (Fiat Chrysler Automobiles NV)
VOW GR (Volkswagen AG)

People
Alexander Dobrindt (Federal Republic of Germany)
Graziano Delrio (Republic of Italy)
Karl-Thomas Neumann (Adam Opel AG)
Martin Winterkorn (Italdesign Giugiaro SpA)
Sergio Marchionne (Fiat Chrysler Automobiles NV)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: Hold UST 5s30s Flatteners, Initiate Short 3s7s10s, Barclays Says

Hold UST 5s30s Flatteners, Initiate Short 3s7s10s, Barclays Says

(Bloomberg) -- Hurdle for next rate increase by the Fed has been lowered since April FOMC minutes show most participants want to retain optionality of raising rates in June/July, Barclays strategists including Rajiv Setia write in a client note.
  • Barclays recommends maintaining 5s30s flattener
    • Despite recent flattening, 5s30s still ~10bps too steep vs fair value, willingness for Fed not to fall behind curve keeps term premia low
  • Recommends buying 6m3Y ATM, ATM+27bps 1x2 payer spread at zero cost
    • FOMC minutes sounded more hawkish; increased uncertainty about Fed has caused top-left vols to move slightly higher, now attractive for short vol trades targeting higher rates
  • Ahead of next week’s supply, recommends being short 7s on 3s7s10s fly, hedged for market directionality
    • Sector looks rich by ~4bps; fly tends to cheapen ahead of auction, typically by ~3bps
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Rajiv Setia (Barclays PLC)

To de-activate this alert, click here

UUID: 7947283

HALISTER1: EGB Supply Dominates Convexity But Forward Yields Elevated: Citi

EGB Supply Dominates Convexity But Forward Yields Elevated: Citi

(Bloomberg) -- Not convinced that convexity value is driving EGB long-end trends, Citigroup strategists including Harvinder Sian write in client note.
  • While more long and super long issuance is expected, the pickup in markets such as Belgium and Spain look aggressive against outright levels in the context of the low yield environment
  • Implied sovereign forward rates based on constant maturity bond yields:
    • 10Yfwd20Y for France and Belgium are both at 2.3% with the 30Yfwd20Y rate at 2.53% and 3.28% respectively
    • Spanish 10Yfwd20Y is at 3.80% with the 30Yfwd20Y implied forward near 6%
  • These forward rates look high and are confirmed when assessing value in ASW (yield/yield) with the Belgian ASW forward box in 30Yfwd50Y at +244bp
  • Investors should look to extend cash-cash to the super longs to exploit the steepness and at the same time reduce notional risk in Spain and Belgium, as most 30y bonds are trading well above par
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Harvinder Sian (Citigroup Inc)

To de-activate this alert, click here

UUID: 7947283

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

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

(Bloomberg) -- USD/TWD non-deliverable forwards account for 29.4% of total volume today, according to trades reported to DTCC; USD/KRW second-most active at 22.2%, USD/INR third at 16.5%.
  • Notional amounts traded include:
    • $100m of USD/TWD at 32.772; matures Sept. 21
  • Total volume was $9.5b as of 3:45pm HKT; global total yesterday was $67.2b, with USD/BRL accounting for 22.7%
  • NOTE: Taiwan’s new president resists China ’one-country’ pressure
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here

UUID: 7947283

HALISTER: Gameloft Rises as Vivendi Ups Hostile Bid Through Stake Purchase

Gameloft Rises as Vivendi Ups Hostile Bid Through Stake Purchase

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
VIV FP (Vivendi SA)
GFT FP (GameLoft SE)

People
Bryan Garnier Am (Bryan Garnier & Co Ltd)
Vincent Bollore (Bollore SA)
Yves Guillemot (UBISOFT Entertainment)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: EU CREDIT DAILY: FOMC Shadow Looms; VW Agreement, HSBC Closures

EU CREDIT DAILY: FOMC Shadow Looms; VW Agreement, HSBC Closures

(Bloomberg) -- Spreads may open better bid with Asia risk stronger overnight, but aftermath of FOMC minutes and concerns of a more hawkish macro environment are weighing on sentiment as we head toward the weekend, Bloomberg strategist Simon Ballard writes.
  • Geopolitical and corporate events also denting risk appetite; airline and travel sectors under pressure as search for missing EgyptAir plane enters second day
    • If terrorist act confirmed, could further undermine near-term risk sentiment
  • G-7 meeting today in Japan likely to discuss Brexit as key concern; may offer headline risk to credit-market sentiment
  • Risk Appetite model highlights balance between Fed rate concerns and EUR regional risk dynamics
  • CDX IG closed -0.4bps at 85.06 in overnight session; iTraxx Asia Ex Japan IG currently -0.6bps at 145.21
NEWS
  • Corporate News
  • Volkswagen Reaches Inhouse Wage Agreement With Union IG Metall
  • Applied Materials Sales Forecast Beats as Chipmakers Upgrade
  • John Menzies Trading in Line With Forecast; New Pension Advisor
  • Richemont FY Rev. In Line With Ests., Oper. Profit Misses
  • CFE 1Q Rev. Misses Ests.; Order Backlog Falls to EU3.97 Bln
  • Tokio Marine Forecasts Profit Below Consensus, Raises Dividend
  • Ladbrokes, Coral Must Sell 400 Shops to Merge, U.K.’s CMA Says
  • Financial News
  • Negative Rates Scorned by Japan’s Megabanks as Charts Turn Ugly
  • Resona to Partner With BNP Paribas Unit in First U.S. Foray
  • VEB Will Need 360b Rubles Recapitalisation in 2017: Kommersant
  • HSBC to Close Half of India Branches in Digital Banking Push
  • Deutsche Bank Said to Be Probing Some Employee Trades
  • Credit Rating News
  • Moody’s Says Australia’s Fiscal Objective Will Be Challenging
  • Bolivia’s Sovereign Ratings Affirmed by S&P With Stable Outlook
  • Other News
  • Defaults Throw Wrench in China’s $3 Trillion Company Bond Engine
  • Market Impact of Brexit Is Key Concern for G-7 Finance Chiefs
  • Not Much Worries Bond Traders as Term Premium Falls to 1962 Lows
ANALYST VIEWS
  • We would expect nothing in the market today as we reflect on the potential for a (U.S.) rate hike and investors absorb that possibility as well as the plethora of deals issued this week: creditmarketdaily.com
NEW ISSUES
  • Eastman Chemical EU550m 7Y MS +135
  • Greene King Finance GBP300m 19Y UKT +265
  • Hanesbrands EU500m 8NCL Senior Notes at 3.5%
  • Holcim Finance Total EU2b 7Y, 12Y Bonds
  • JAB Holdings EU750m 7Y MS +155
  • KfW GBP300m 1.125% 12/2019 Tap UKT +38
  • Nexans EU250m 5NCL Senior Notes 3.25%
  • NWB Bank EU500m 20Y MS +20
  • State of Saarland EU250m 10Y MS -3
  • Sanoma Corporation EU200m 3.5Y 3.5%
  • Stockholm Council SEK1.5b 9/2021 Green Bonds MS +47
  • Svenska Cellulosa EU500m 5Y MS +55
  • Vivendi EU1b 5Y MS +85, EU500m 10Y MS +135
  • Willis Towers Watson EU540m 6Y MS +203
  • 4finance EU100m 5Y Notes to Yield 11.25%
  • Romania EUR1B 12YR Bonds MS+225BPS
  • 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)

Topics
Leveraged Finance

To de-activate this alert, click here

UUID: 7947283

HALISTER: DAIMLER STREET WRAP: Trucks Warning Overdue, Credibility at Risk

DAIMLER STREET WRAP: Trucks Warning Overdue, Credibility at Risk

(Bloomberg) -- Daimler said aftermarket yesterday that it won’t meet its 2016 Trucks guidance for flat operating profit, that it expects significant Ebit decline.
  • Says global truck market, especially NAFTA, has worsened recently
  • Says hasn’t changed group ongoing Ebit forecast for slight increase y/y
  • Co. booking EU100m restructuring charge in Brazil, and charge in “mid hundreds of millions of euros” related to Takata airbag recalls
Exane (neutral)
  • Truck profit guidance cut “long overdue”
  • May revive fears about co. ability to manage through cycle
  • Further warnings likely in “twilight” of cycle, Mercedes guidance may also be in doubt after weak 1Q
  • Staying neutral because of value only
DZ Bank (hold)
  • Puts another question mark on Daimler’s margin target of 8% over the cycle at Trucks unit
  • See risk of profit warning at Mercedes-Benz cars in 2H based on cautious statements regarding the U.S. car market recently
Barclays (equalweight)
  • Co. finally decided to change “unrealistic” truck guidance, which hasn’t helped co. credibility recently
  • Barclays already had est. 17% drop in trucks Ebit
  • Takata-recall related charge EU500m is more bad news
Kepler Cheuvreux (buy)
  • Fact that co. keeping group guidance unchanged suggests other divisions are running well
  • Worries about U.S. truck market already reflected in shares
  • PT cut to EU77 from EU82
Goldman (buy)
  • “Well-anticipated” trucks forecast cut “rebases to expectations” and leaves room for positive surprise if end markets improve
  • Enables Trucks investor day on June 7-8 to “strike a more constructive tone”
NOTE: Stock is down 26% YTD vs 18% fall in the SXAP index
  • Has 25 buy ratings, 10 hold, 0 sell; average PT of EU80 implying ~39% upside
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
DAI GR (Daimler AG)
7312 JP (Takata Corp)
VOLVB SS (Volvo AB)

To de-activate this alert, click here

UUID: 7947283

HALISTER1: India Offshore Rules to Strengten Market, Khaitan’s Ajinkya Says

India Offshore Rules to Strengten Market, Khaitan’s Ajinkya Says

(Bloomberg) -- Regulator SEBI’s offshore derivative rule changes are further step toward making capital markets more robust, Khaitan & Co. partner Bijal Ajinkya tells Bloomberg.
  • Rules will encourage direct market access from overseas investors instead of through intermediate issuances, Ajinkya says in phone interview
  • Rule change is step toward tracking money laundering, curbing “black money”
  • Stricter know your customer rule, which identifies ultimate beneficial owner, will increase ODI costs and processing time
  • Regulatory framework of tracking intermediate transfers leads to higher accountability on issuer of ODIs
  • NOTE: India SEBI Approves Tighter Rules for Offshore Derivatives
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here

UUID: 7947283

HALISTER: India Shows Cook the Love It’s Yet to Give Pricey Apple iPhones

India Shows Cook the Love It’s Yet to Give Pricey Apple iPhones

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
AAPL US (Apple Inc)

People
Timothy Cook (Apple Inc)
Cyrus Mistry (Tata Sons Ltd)
Mukesh Ambani (Reliance Industries Ltd)
Narendra Modi (Republic of India)
Shah Khan

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER: Bayer: If You Can’t Be No. 1 in Seeds, Buy Your Way to the Top

Bayer: If You Can’t Be No. 1 in Seeds, Buy Your Way to the Top

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
BAYN GR (Bayer AG)
MON US (Monsanto Co)

People
Jacob Thrane (Baader Bank AG)
Marijn Dekkers (Bayer AG)
Markus Manns (Union Investment Gmbh)
Werner Baumann (Bayer AG)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283