HALISTER: Deutsche Bank Executives Acquitted at Munich Fraud Trial

Deutsche Bank Executives Acquitted at Munich Fraud Trial

(Bloomberg) -- Munich court acquits Deutsche Bank Co-Chief Executive Officer Juergen Fitschen and four former bank executives of charges they colluded to deceive a civil court to fend off EU2b claim by businessman Leo Kirch.
  • Presiding Judge Peter Noll delivers verdicts at Munich court
  • NOTE: April 12: Deutsche Bank Co-CEO Close to Acquittal After Yearlong Trial Link
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
DBK GR (Deutsche Bank AG)

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Juergen Fitschen (Deutsche Bank AG)

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UUID: 7947283

(2) *DEUTSCHE BANK EXECUTIVES ACQUITTED AT MUNICH FRAUD TRIAL

*DEUTSCHE BANK EXECUTIVES ACQUITTED AT MUNICH FRAUD TRIAL

Alerts: HALISTER, HALISTER1
Source: BN (Bloomberg News)

Tickers
DBK GR (Deutsche Bank AG)

People
Josef Ackermann (Johann Wolfgang Goethe Universitaet)
Juergen Fitschen (Deutsche Bank AG)
Rolf Breuer (Deutsche Bank AG)

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UUID: 7947283

HALISTER1: Fade Any UST Flattening Should Fed Keep June Hike on Table: MS

Fade Any UST Flattening Should Fed Keep June Hike on Table: MS

(Bloomberg) -- Fed will aim to keep possibility of a June rate hike on the table, resulting in curve flattening; recommend fading any flattening by adding to UST 5s30s curve steepeners, Morgan Stanley strategists including Matthew Hornbach write in client note.
  • Fed to be less pessimistic about chance of June rate hike than the 20% probability currently implied by the market
  • Continue to recommend 5s30s steepeners between 1.30%-1.40%
  • Real term premiums can rise going into the FOMC meeting; recommend taking off outright longs in 30Y TIPS
    • Instead recommend long 04/2020 breakevens; TIPS index extension will be quite large at 0.25yrs this month; large index extensions typically coincide with positive breakeven returns
  • Recent widening in swap spreads mostly driven by widening in funding rates between spot 3m Libor and 3m GCF repo
    • Widening concentrated in 2Y point; 5Y spreads have lagged, partly due to corporate issuance in the belly of the curve
    • 5Y spreads should have widened more on the factor driving 2Y spreads; recommend entering 5Y spread wideners at -4bps
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
MS US (Morgan Stanley)

People
Matthew Hornbach (Morgan Stanley)

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UUID: 7947283

HALISTER1: UniCredit’s Atlante Investment Reduces Its CoCo Buffer: Moody’s

UniCredit’s Atlante Investment Reduces Its CoCo Buffer: Moody’s

(Bloomberg) -- UniCredit’s and Intesa Sanpaolo’s EU1b investments in Italy’s bank rescue fund Atlante is credit negative for them because the fund is buying shares of banks that are at risk of resolution, Moody’s Investors Service says in twice-weekly Credit Outlook.
  • Atlante’s guarantee of Pop. Vicenza’s EU1.5b share sale, previously guaranteed by UniCredit alone, remains credit negative because UniCredit’s capital buffer is smaller than those of other investing banks
  • If UniCredit’s stake in Atlante were deducted from regulatory capital, “it would leave UniCredit with a smaller capital buffer in excess of its prudential capital requirement,” leaving investors in bank’s AT1 securities at risk of coupon suspension
  • UniCredit’s Atlante investment amounts to 0.26% of RWAs; bank has 10.73% CET1 ratio, vs requirement of 10%
  • NOTE: Italy Bank Lifeline Buys Time as Atlas Shows Herculean Task (April 19)
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ISP IM (Intesa Sanpaolo SpA)
UCG IM (UniCredit SpA)
1021Z IM (Banca Popolare di Vicenza)

Topics
Subordinated Debt

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HALISTER1: Optimize Mild Bullish EUR Rates Trades on Back-Up in Yields: SG

Optimize Mild Bullish EUR Rates Trades on Back-Up in Yields: SG

(Bloomberg) -- Recent back-up in yields and cheap EUR rates volatility is an opportunity to set conditional bullish trades, Societe Generale strategist Adam Kurpiel writes in client note.
  • Buy EUR 6m5y2y ATMF/ATMF-25bp receiver spread
    • Maximum payout capped at 25bp unless EUR 5y2y forward rate decreases in the next 6-mo. by more than 40bp and well below last year’s lows
    • 1x1 receiver spread achieves better leverage (payout to premium ratio) than simple ATMF receiver
  • Durably accommodative ECB, ongoing asset purchases and looming near-term risks imply there is value in benefiting from the recent bearish move to reset conditional carry trades and bull-flatteners ahead of the summer break
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Adam Kurpiel (Societe Generale SA)

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