HALISTER1: Fed Could Use Additional Time to Prepare Mkts for a Hike: UBS

Fed Could Use Additional Time to Prepare Mkts for a Hike: UBS

(Bloomberg) -- Assuming Fed wants to continue letting financial conditions ease and avoid a “tantrum,” it will need to provide consistent message over time, UBS economists Drew Matus, Maury Harris, Samuel Coffin, Dave Liang write in note.
  • “Reasonable” for FOMC to take additional time to prepare mkts for rate increases; however, “that time is not unlimited”
    • UBS’s forecast for improving growth in 2H suggests next rate hike will be in Sept., followed by one in Dec.
  • At this wk’s mtg, Fed is likely to reinforce view of healthy economy, while noting divergence between growth and jobs
    • Should also assert that inflation will move toward 2% over medium term
  • There’s risk that Fed “fixates” on weak backward-looking data rather than signaling economy continues to grow, further complicating its message
    • Growing division on FOMC suggests Fed will continue to face challenges in communications, with fewer members likely to give consensus view that would reflect most possible course of action, UBS economists wrote in separate note
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Drew Matus (UBS Asset Management Japan Ltd)
Maury Harris (UBS Asset Management Japan Ltd)
Samuel Coffin (UBS Global Asset Management Japan Ltd)
David Liang (UBS Securities LLC)

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UUID: 7947283

HALISTER: AIG to Join Two Sigma, Reunite With Duperreault in Tech Venture

AIG to Join Two Sigma, Reunite With Duperreault in Tech Venture

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
AIG US (American International Group Inc)
3865420Z US (Two Sigma Investments LP)
MMC US (Marsh & McLennan Cos Inc)

People
Brian Duperreault (Hamilton Insurance Group Ltd)
David Siegel (Two Sigma Investments LLC)
Doug Dachille (American International Group Inc)
John Overdeck (Two Sigma Investments LLC)
Peter Hancock (American International Group Inc)

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UUID: 7947283

HALISTER: Ex-Citigroup Rates Executive Wikstrom Joins E-Trading Startup

Ex-Citigroup Rates Executive Wikstrom Joins E-Trading Startup

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
C US (Citigroup Inc)
1288571D US (Direct Match Holdings Inc)
BATS US (Bats Global Markets Inc)

People
Jim Greco (Direct Match LLC)
Roland Wikstrom (Citigroup Inc)
Kristi Neller (Direct Match LLC)
William O'Brien (Direct Match LLC)

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UUID: 7947283

HALISTER1: UST MORNING CALL: FOMC Uncertainty Obscures Curve Direction

UST MORNING CALL: FOMC Uncertainty Obscures Curve Direction

(Bloomberg) -- USTs edge higher in Asia, then see subdued session in London; belly of the curve underperforms in early New York trading ahead of 5Y supply.
  • Expect some strength in the durable goods report, look for new orders to rise 1.9%; 5Y supply to require some concession, expect rates remain range-bound ahead of FOMC, JPMorgan’s Jay Barry writes in a client note
  • RBS likes going long against 1.95% lvl in 10s, with a closing stop over 2%; Fed not expected to signal anything for June, strategist John Briggs in client note
  • Ahead of FOMC, market hesitant on direction of curve; 2s5s at top-end of range, momentum indicators approaching too steep conditions; favor risk/reward of a less dovish Fed flattening the curve, BMO’s Aaron Kohli writes in a client note
  • Technicals
    • Support: 128-31/128-26 (March 28 low, 76.4% Fibo of March 16 rally), 128-20+/128-21 (March 23 low, 100-DMA)
    • Resistance: 129-22+ (April 25 high), 129-25 (April 22 high), 129-29 (April 21 high), 130-02+ (April 20 mid price)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
Jay Barry (JPMorgan Chase & Co)
John Briggs (RBS Securities Inc)

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UUID: 7947283