HALISTER1: Long-Dated EUR Vega Favored on Callable Issuance Fall: Barclays

Long-Dated EUR Vega Favored on Callable Issuance Fall: Barclays

(Bloomberg) -- Long-dated EUR vols on long rates attractive as expect recent spike in callable issuance to subside, Barclays strategists, including Amrut Nashikkar, write in a client note.
  • Recommend buying EUR 7y30y vs 7y10y straddles
    • Positive vol roll-down with the spread between 30y and 10y vols increasing as the time to expiry falls
    • Overall 1y carry of the trade is also somewhat positive, despite the sharper rate roll-down of 10y rates
  • EUR bottom right did not underperform even as issuance of callable notes spiked
  • Issuance of long-dated callable notes has also spiked over the past month, with supply in 2Q already being the highest since 2013
  • Expect this spike in issuance to be a one-off event, with improvement in financial conditions since March likely having led to the release of some pent-up demand for such notes
  • Over the coming months structured note issuance is likely to be slow, given the extremely low levels of long-dated rates
  • Rates in EUR are so low that even with a pick-up obtained from selling options, the absolute yield on the trade may still not be attractive enough for investors
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Amrut Nashikkar (Barclays PLC)

To de-activate this alert, click here

UUID: 7947283

HALISTER: Oil Rises From Two-Week Low as Threat of Supply Disruption Looms

Oil Rises From Two-Week Low as Threat of Supply Disruption Looms

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
CVX US (Chevron Corp)
RDSA LN (Royal Dutch Shell PLC)
COP US (ConocoPhillips)

People
Amin Nasser (Saudi Arabian Oil Co)
Angus Nicholson (IG Group Holdings PLC)
Giovanni Staunovo (UBS Asset Management Japan Ltd)
Guillaume Long (Republic of Ecuador)

Topics
Energy and Commodity Markets

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

UUID: 7947283

HALISTER: Dialog Semi Drops as Fellow Apple Supplier Sees Market Weakness

Dialog Semi Drops as Fellow Apple Supplier Sees Market Weakness

(Bloomberg) -- Dialog Semiconductor declines as much as 4.4%, most on SX8P index, after InvenSense quarterly outlook misses ests., co. sees weakness in mobile market.
  • Pares decline to 2%, trading vol. 50% of 3-mo. daily avg
  • InvenSense adds to recent negative newsflow from Apple supply chain, Charles Bordes, analyst at AlphaValue (buy on Dialog) says by phone
    • “The same goes for the two” with both cos. being “very dependent” on Apple
    • In addition, investors may have fears that next iPhone will be “only a slight evolution” from existing one, adding uncertainty on any potential sales growth
    • Dialog’s share buyback announcement after market close yday “always positive,” yet size too small to have any significant impact on shares
  • Pacific Crest (sector weight on InvenSense) says in note that “things go from bad to worse” for InvenSense, even with muted expectations
    • Samsung share loss, high Apple channel inventories continue to hurt demand
RELATED:
  • Dialog Semi cut its 2016 rev. outlook last week, Kepler sees lower projections linked to coming iPhone 7 ramp-up
  • Dialog gets ~71% of its rev. from Apple, InvenSense ~30%, according to Bloomberg data
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
AAPL US (Apple Inc)
DLG GR (Dialog Semiconductor PLC)
INVN US (InvenSense Inc)

People
Charles Bordes (Alphavalue Sas)

To de-activate this alert, click here

UUID: 7947283

HALISTER: Comcast Pays $490 Million to Settle Ralph Roberts Life Insurance

Comcast Pays $490 Million to Settle Ralph Roberts Life Insurance

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
CMCSA US (Comcast Corp)

People
Brian Roberts (Comcast Corp)
Ralph Roberts (Comcast Corp)
Jeffrey Bewkes (Time Warner Inc)
John Demming (Comcast Corp)
Joshua Husbands (Holland & Knight LLP)

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

UUID: 7947283

HALISTER: SoftBank’s Profit Plummets as Sprint’s Losses Persist (Correct)

SoftBank’s Profit Plummets as Sprint’s Losses Persist (Correct)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
9984 JP (SoftBank Group Corp)
S US (Sprint Corp)

People
Masayoshi Son (SoftBank Group Corp)
Nikesh Arora (SoftBank Group Corp)
Raul Claure (CTIA - The Wireless Association)
Satoru Kikuchi (SMBC Nikko Securities Inc)

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

UUID: 7947283

HALISTER1: DBRi 2030 Auction to Go Well, Cheap vs Nominal Bunds: SocGen

DBRi 2030 Auction to Go Well, Cheap vs Nominal Bunds: SocGen

(Bloomberg) -- DBRi 04/2030 remains particularly cheap, offering a z-spread pickup of 13bps vs bunds, while most core linkers offer pickup of ~5bp, SocGen strategists including Marc-Henri Thoumin write in client note.
  • While auction bond will be tapped further, see no reason for it to trade so much cheaper than DBRi 2026, OATei 2030
  • Bond remains an excellent candidate to own in IOTA terms (on breakeven basis vs equivalent inflation swap)
  • Counting on switches from other core linkers, shorter DBRis, expect the auction to go well
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Marc-Henri Thoumin (Societe Generale SA)

To de-activate this alert, click here

UUID: 7947283

HALISTER1: Philippines Exports Preview: Negative for 12th Month in a Row

Philippines Exports Preview: Negative for 12th Month in a Row

(Bloomberg) -- Philippines’ exports probably contracted for 12th straight month in March, economists say.
  • Median est. in Bloomberg survey is -9.1% y/y following 4.5% drop in Feb.; ests. range from -11.5% to -5.0%; data due 9am local time tomorrow
  • Electronics exports have grown in past five months, mitigating deeper declines in other areas
  • Peso rose 3.2% vs dollar in March, biggest monthly gain since June 2012; currency has risen net 0.5% this year
  • USD/PHP now at 46.810, lowest since April 29; 200-DMA is at 46.821
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here

UUID: 7947283

HALISTER1: EU CREDIT DAILY: Strong Primary; C. Suisse Loss, Emirates Climbs

EU CREDIT DAILY: Strong Primary; C. Suisse Loss, Emirates Climbs

(Bloomberg) -- Corporate credit spreads remain well-underpinned, even as the market may be coming under some veiled pressure from weak economic data, intensifying Brexit risk and speculation over the status of the FOMC’s June meeting, Bloomberg strategist Simon Ballard writes.
  • Primary market pricing highlights consistency of investor risk appetite; new deals pricing inside IPT
    • Nevertheless, investors do seem to increasingly recognize the need to balance the hunt for yield with capital preservation prospects
  • EUR IG/HY spread currently 363bps, from high of 496bps in February and low of 153bps in May 2014
    • Curve could re-steepen further on new macro weakness, decline in risk appetite; ECB CSPP a fillip for EUR IG corp risk relative to HY
  • Risk Appetite model maintaining drift higher in spread dispersion while vol remains anchored
  • CDX IG currently -0.1bps at 84.29 in overnight session; iTraxx Asia Ex Japan IG is currently +0.2bps at 145.68
NEWS
  • Corporate News
  • Nokia Revenue Misses Estimates Amid Waning Carrier Spending
  • EasyJet 1H Loss Narrower Than Est; Plans to Raise Div. Ratio
  • Thyssenkrupp CFO Repeats Consolidation Needed in Steel Sector
  • China Railway Materials to Make Bond Payment, Plans Asset Sales
  • Emirates Group FY Profit Climbs 50% as Airline Profit Rises 56%
  • Financial News
  • Credit Suisse Posts Second Straight Loss as Thiam Deepens Cuts
  • ING Profit Falls on Regulatory Costs, Loss at Markets Unit
  • Munich Re Cuts Full-Year Profit Target to 2.3 Billion Euros
  • Hiscox 1Q Gross Written Premiums Rise 10% in Local FX
  • SoftBank Profit Misses Estimates on Continued Losses at Sprint
  • Credit Rating News
  • Fitch Affirms Sumitomo Life at ’A’; Outlook Stable
  • Evonik Raised to Baa1 by Moody’s on Air Products Unit Deal
  • S&PGR Afrms Goldman Sachs’ A$ Cash Reserves Fund At ’AAAm’
  • Other News
  • German Industrial Output Falls for Second Month as Demand Cools
  • Negative-Rate Lending Closer to Reality in Japan as Tibor Slumps
  • A New Generation of German Homebuyers Falls in Love With Draghi
ANALYST VIEWS
  • There is no fear in the corporate bond market. Last week’s broad macro weakness was so last week: creditmarketdaily.com
NEW ISSUES
  • Airbus Group Finance EU1.5b 10Y, 15Y Bonds
  • AstraZeneca EU2.2b 3-Part Deal
  • Fonciere Des Regions EU500m 10Y Green Bond MS +137
  • L-Bank GBP250m 5Y UKT +42
  • Shell EU1.75b 8Y, 12Y Bonds
  • 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
1000Z UH (Emirates Airline)

To de-activate this alert, click here

UUID: 7947283

HALISTER1: AUCTION PREVIEW: Dutch Re-Opening Seen Offering Z-Spread Value

AUCTION PREVIEW: Dutch Re-Opening Seen Offering Z-Spread Value

(Bloomberg) -- Netherlands to sell 0.5% 07/2026 for EU2b-3b at 11am CEST; analysts highlight value vs RFGBs and in ASW, supply not expected to be swapped.
  • ABN Amro (Kim Liu)
    • Don’t expect the re-opening to be swapped back by using derivatives; Dutch bond will also compete with demand for Austria auction
    • Dutch 10Y trades relatively cheap on ASW and Z-spread vs neighboring bonds; DSL/RFGB 10Y spread looks tight
  • Rabobank (Richard McGuire)
    • Don’t anticipate this tap to be swapped as DSTA strives to achieve its target of an average maturity of 5.5Y at end of 2016
    • DSL 2026 looks attractive versus swap, offers ~18bps pick-up
  • ING (Martin Van Vliet)
    • Despite good performance yesterday, roll vs DSL 07/25 at 13.2bps still looks attractive; 23bps pick-up vs Germany, shows DSL offers decent overcompensation for liquidity
    • Attractive to box 5s10s DSL flatteners vs RFGBs, given that Finland might tap the 10Y or 15Y later this quarter, and new 5yr DSL due next month
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
3584485Z NA (ABN AMRO Group NV)

People
Kim Liu (ABN AMRO Group NV)
Martin Van Vliet (ING Groep NV)
Richard McGuire (Rabobank International)

To de-activate this alert, click here

UUID: 7947283

HALISTER: SoftBank Profit Misses Estimates on Continued Losses at Sprint

SoftBank Profit Misses Estimates on Continued Losses at Sprint

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
9984 JP (SoftBank Group Corp)
S US (Sprint Corp)

People
Masayoshi Son (SoftBank Group Corp)
Nikesh Arora (SoftBank Group Corp)
Raul Claure (CTIA - The Wireless Association)
Satoru Kikuchi (SMBC Nikko Securities Inc)

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

UUID: 7947283