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

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

(Bloomberg) -- USD/KRW non-deliverable forwards account for 37.0% of total volume today, according to trades reported to DTCC; USD/INR second-most active at 17.8%, USD/TWD third at 16.6%.
  • Notional amounts traded include:
    • $110m of USD/INR at 68.625; matures Sept. 21
  • Total volume was $11.9b as of 3:05pm HKT; global total yesterday was $59.9b, with USD/KRW accounting for 24.2%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER: Regina Miracle Falls After Top Customer L Brands Cuts Forecast

Regina Miracle Falls After Top Customer L Brands Cuts Forecast

(Bloomberg) -- Regina Miracle shares down as much as 7.5%, most since Jan. 14, on vol. 1.6x 3-mo. daily avg; extends decline into 5th day.
  • Earlier, L Brands lowers yr adj. EPS forecast to $3.60-$3.80 from $3.90-$4.10, est. $4.04
  • NOTE: L Brands is Regina Miracle’s largest customer, making up 30% of total rev. in fiscal 2015, according to prospectus filed in Sept.
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
LB US (L Brands Inc)
2199 HK (Regina Miracle International Holdings Ltd)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: Strong Demand Expect for SPGB Supply

AUCTION PREVIEW: Strong Demand Expect for SPGB Supply

(Bloomberg) -- Spain to sell 0.25% 01/2019, 4.80% 01/2024, 1.95% 07/2030 for EU2b-3b at 10:30am CET. Analysts are optimistic on the auction given reduced size, recent investor demand, strong carry and roll dynamics.
  • Danske Bank (Anders Moller Lumholtz)
    • 3Y benchmark to attract strong demand; first SPGB on the curve offering positive yield; does not look particularly attractive vs BTPs or in RV; small size suggest strong demand
    • Issuance in 5Y segment has been limited recently; good domestic demand seen in this part of SPGB curve
    • Continued ECB QE buying in 2024s has left market makers short, expect decent demand from these accounts; 8Y sector also offers attractive carry and roll
    • 15Y bonds attractive on the curve vs Italy
  • Mizuho (Antoine Bouvet)
    • Limited auction size supportive factor for the taps; like 8Y sector of SPGB curve, auction should be easily absorbed
    • Performance on 07/2030 has been strong, hinting at good demand from investors
    • Recent EC decision to grant one more year to reach its deficit target supportive for Spain, investor focus remains on upcoming elections June
  • Commerzbank (Christoph Rieger)
    • Spain outperformed Italy ahead of SPGB auctions, versus now trading at the lower end of the range, further outperformance looks limited even after supply
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Anders Lumholtz (Danske Bank A/S)
Anders Moeller Lumholtz (Danske Bank A/s)
Antoine Bouvet (Mizuho Financial Group Inc)
Christoph Rieger (Commerzbank AG)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Hawkish Fed; Merck Beats, Julius Baer AUM Rises

EU CREDIT DAILY: Hawkish Fed; Merck Beats, Julius Baer AUM Rises

(Bloomberg) -- Risk assets may feel the impact of yesterday’s upward shift in the U.S. yield curve after minutes of the April FOMC meeting had the hawkish tone the market had been wary of, writes Bloomberg strategist Simon Ballard.
  • While changes in Fed rate policy generally have a global reach, the EUR credit-market direction is currently set as much by its own drivers
    • Uncertainty surrounding the U.K. referendum on EU is undermining investor risk appetite, while the prospect of ECB’s corporate-sector purchase program offers structural support
  • Airline/travel sector may be under pressure this morning as EgyptAir flight from Paris to Cairo disappears from radar
  • Greece back under the microscope; contingency fiscal- mechanism bill submitted to parliament as Eurozone weighs debt relief in bid to keep IMF in program
  • Risk Appetite model registers decline in vol and increase in spread dispersion, fueled by market uncertainty
  • CDX IG closed +1.2bps at 83.82 in overnight session; iTraxx Asia Ex Japan IG currently +2.5bps at 145.21
NEWS
  • Corporate News
  • Merck KGaA Profit Beats Estimates on Sigma-Aldrich Deal
  • Henkel 1Q Adj. Operating Profit Beats Est.; Confirms ‘16 Outlook
  • Britvic 1H Ebita In Line With Estimates, Confirms Forecast
  • Mothercare FY Underlying Pretax in Line, International Tough
  • Royal Mail FY Adj EPS, Revenue Beat Estimates
  • National Grid Plc Full year results 2015/16
  • Spire Healthcare Says FY16 Forecast in Line With Expectations
  • Financial News
  • Indian State Banks Post $2.3 Billion in Losses on Bad Loans
  • Bank Leumi 1st-Quarter Net Drops On One-Time Profits, Corp. Tax
  • Ageas 1Q Insurance Profit Beats Ests. on Gains in Life Business
  • Julius Baer End-April AUM Rise 2% to CHF305b, FX Impact Negative
  • Hargreaves Lansdown Says 4-Month Net Inflows GBP2.3b
  • Credit Rating News
  • Hungary’s Barcza ‘Not Optimistic’ on Fitch Upgrade Now: Hirlap
  • Fitch: China Cement Volumes Do Not Translate Into Price Recovery
  • Other News
  • Moody’s Cuts 2016 U.S. Growth Forecast, Cites Weak Global Demand
  • EgyptAir’s Paris-to-Cairo Flight Vanishes With 66 on Board
  • Fed Puts June Rate Increase on Table Provided Economy Says Go
ANALYST VIEWS
  • Primary will dominate today - and it promises to be a heavy session again, but the machinations around US interest rate risk will have the non-corporate bond market investors’ attention: creditmarketdaily.com
  • Ways that investors can effectively position for the (U.K. EU referendum) vote in FX, Fixed Income and Equities: Credit Suisse
NEW ISSUES
  • LBBW $650M 3Y Covered MS +51
  • EDC GBP350M 12/2020 UKT +42
  • SEB EU1B 4Y FRN 3ME +47
  • Aegon Bank EU500M 7Y Covered MS +14
  • Ceske Drahy EU400M 7Y MS +180
  • Islandbanki HF EU75M 2.875% 7/2018 TAP MS +247
  • BNP Paribas EU1B 12Y MS +78
  • Eurofima EU100M 0.25% 4/2023 TAP MS +2~
  • Caja Rural De Castilla-LM EU500M 8Y Covered MS +53
  • 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
MRK GR (Merck KGaA)

Topics
Leveraged Finance

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UUID: 7947283

HALISTER1: Enter UST 2s5s Steepeners as Market Underprices June Hike: MS

Enter UST 2s5s Steepeners as Market Underprices June Hike: MS

(Bloomberg) -- Current 1-in-4 implied rate hike probability in June is too low given April FOMC minutes, recommend entering UST 2s5s steepeners, write Morgan Stanley strategists Matthew Hornbach and Guneet Dhingra.
  • April minutes took the market by surprise, causing investors to reassess the Committee’s reaction function period between March and April meetings and putting a June rate hike on the table
  • Market should be pricing 25%-50% probability of June hike until past May non-farm payrolls
  • Cost of negative carry and roll on short 2Y is ~4bps per month, instead recommend entering 2s5s steepeners at 49bps which rolls positively at +1bp
    • Risks to trade include overseas demand in the belly of UST curve, tightening of financial conditions
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
MS US (Morgan Stanley)

People
Guneet Dhingra (Morgan Stanley)
Matthew Hornbach (Morgan Stanley)

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UUID: 7947283

HALISTER: Technip, FMC Technologies to Combine in All-Stock Deal

Technip, FMC Technologies to Combine in All-Stock Deal

(Bloomberg) -- Technip shareholders to receive 2 shares of the combined company for each share of Technip; FMC Technologies shareholders to receive 1 share of the combined company for each share of FMC Technologies.
  • New company to be called TechnipFMC, will be listed on the New York and Paris stock exchanges
  • TechnipFMC will have an equity value of $13b based on pre- announcement share prices
  • Deal expected to deliver at least $400m in annual pretax cost synergies in 2019
  • Significantly accretive to both companies’ earnings per share
  • Statement:Link
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
FTI US (FMC Technologies Inc)
TEC FP (Technip SA)

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UUID: 7947283