HALISTER1: FOMC Won’t Send Strong Signal About a June Hike: Renaissance

FOMC Won’t Send Strong Signal About a June Hike: Renaissance

(Bloomberg) -- A June rate hike remains unlikely given Brexit vote and Yellen recently saying that “caution is especially warranted” in adjusting policy, Renaissance Macro Research economist Neil Dutta writes in note.
  • Fed will also need several mos. of data before determining whether weak 1Q was a “fluke”
  • Tone of FOMC statement released this wk should be “neutral” relative to last mo.’s, will weigh continued U.S. growth against risks abroad
    • Will likely be mostly a “carbon copy” of statement in March
  • 2nd paragraph will be “utmost importance”; question is whether policy makers say global economic/financial developments still pose risks
    • Fed needs to find language that notes recent improvement in global economic data, yet conveys that “we are not out of the woods yet”
  • Mkt reaction should be “fairly muted”
    • Renaissance continues to see low chance of June hike, doesn’t expect “strong signal” about one this wk; expects 2 hikes this yr, in Sept. and Dec.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Neil Dutta (Renaissance Macro Research LLC)

Topics
BGOV Finance

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UUID: 7947283

HALISTER1: UST Valuations ‘Fair’; Add Longs in 5Y Swap Spreads: JPMorgan

UST Valuations ‘Fair’; Add Longs in 5Y Swap Spreads: JPMorgan

(Bloomberg) -- Valuations in Treasuries appear fair as domestic growth remains tepid, though low carry continues to flash warning signs, JPMorgan strategists including Matthew Jozoff write in a client note.
  • FOMC cyclicals suggest there’s room for yields to rise modestly over the near term; stay neutral U.S. duration
  • Long-end has steepened relative to the rest of curve, primarily driven by the decline in Fed tightening expectations
    • 25Y sector now looks cheap on the curve, recommend long belly of 20s25s30s fly
  • Strong demand at recent 5Y TIPS auction argues for wider breakevens over near term
    • Bullish on TIPS breakevens; look narrow to fair value, dealers positioning muted, carry due to turn substantially positive; maintain 5Y breakeven wideners
  • Recommend new longs in 5Y swap spreads; financial issuance is drying up, risk issuance-driven spread tightening is receding, macro environment supportive for more foreign demand for USTs
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Matthew Jozoff (Bear Stearns & Co Inc)

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UUID: 7947283

HALISTER: Fnac Raises Darty Bid Again in Final Attempt to Beat Steinhoff

Fnac Raises Darty Bid Again in Final Attempt to Beat Steinhoff

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DRTY LN (Darty Plc)
FNAC FP (Groupe Fnac SA)
SNH GR (Steinhoff International Holdings NV)

People
Francois-Henri Pinault (Kering)
Graham Renwick (Exane BNP Paribas)

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UUID: 7947283

HALISTER: Fnac Makes Final 170p/Share Offer for Darty

Fnac Makes Final 170p/Share Offer for Darty

(Bloomberg) -- Fnac makes a third and final increased offer to acquire the entire issued and to be issued share capital of Darty at 170p/share in cash, with a partial share alternative.
  • Says has acquired from a number of institutional investors, in aggregate, 48,732,648 Darty shares for 170p per share, representing ~9.2% of the ordinary share capital
  • In aggregate, Fnac has now acquired from a number of investors 87,543,268 Darty Shares, representing ~16.53%
  • NOTE April 21: Steinhoff Leads Rapid-Fire Darty Auction With $1.2 Billion Offer; Steinhoff raised bid to 160p/shr in cash
Link Link to Statement:Link
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
DRTY LN (Darty Plc)
FNAC FP (Groupe Fnac SA)
SNH GR (Steinhoff International Holdings NV)

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UUID: 7947283

HALISTER1: UST MORNING CALL: 2Y Auction Performance May Indicate Fed Views

UST MORNING CALL: 2Y Auction Performance May Indicate Fed Views

(Bloomberg) -- Muted price action overnight, USTs slightly higher, led by 3Y-7Y sector.
  • Focus this week on the FOMC meeting, analyst views here
    • Fed aiming to keep June rate hike on the table, resulting in flatter curve; use any flattening to add to 5s30s steepeners, Morgan Stanley analysts write in client note
  • CFTC data shows specs adding steepener positions via FV (+$4.5b) vs WN (-$2.7b); 80k worth of short covering in EDs, though still next short $32.7b, writes Nomura in a client note
    • Full set of CFTC results here
  • Today’s 2Y supply outcome will be telling of how market is setting up for FOMC; a tail would signal credible expectations the market is shaping up for June hike, BMO says in client note
  • Following BOJ, FOMC, attention may turn to month-end extension flows; Barclays U.S. aggregate est. at +0.07yrs, full list here
    • USTs are closed in Tokyo on Friday, may mean month-end flows from Asia are done on Thursday
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283