Halister News

--NILUKSI KOSWANAGE

Economic Release Details: {PHGDPYOY Index ECOD} --CLARISSA BATINO

(Bloomberg) -- Bayer has made takeover approach to Monsanto, CNBC reports on Twitter, citing Dow Jones.

• NOTE: Bayer Seen Selling Assets in Pursuit of $43b Monsanto
  • Bayer Said to Explore Bid for $43b Seed Company Monsanto

Economic Release Details: {AULFEMPC Index ECOD} --CHRIS BOURKE

(Bloomberg) -- Money mkts haven’t fully priced in a full Fed hike as June meeting should be 50-55% priced compared to the current 35%, Steven Englander, Citigroup head of G-10 FX strategy writes in note received today.

• Markets will have a second round of reaction if speeches today from Fed’s Fischer and Dudley confirm that June hike is seriously on calendar
• In short term, EM is the most vulnerable with yuan fixing a possible “flash-point”
  • Yet, Chinese authorities could also decide they have a lot to gain from not spooking asset markets again
• Big losers are likely to be the negative yielders, including JPY, which may weaken further once U.S. equities stabilize
  • Divergence trade is revived until further notice
  • ECB will breath a sigh of relief and cheer EUR lower
  • Vulnerability of CAD and AUD arises from question marks around their domestic economies
• Fed Minutes surprised on hawkish side, “no one forced them to make a strong explicit reference to June”
• Elephant in the room may well be the desire to distance themselves from negative rates territory
• Fed may view negative rates as toxic politically
• Related story: April FOMC minutes may jolt mkts to price in Fed hike: Citigroup