HALISTER1: Obama Administration Urges States to Revisit Iran Laws: Eli Lake

Obama Administration Urges States to Revisit Iran Laws: Eli Lake

Alert: HALISTER1
Source: BV (Bloomberg View)

People
Barack Obama (United States of America)
Bruce Rauner (State of Illinois)
John Kerry (United States Department of State)
John Kirby (United States Bureau of Public Affairs)
Mark Kirk (United States Senate)

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UUID: 7947283

HALISTER1: EU RATES ROUNDUP: Curve Steepening May Ebb as Cash Flows Support

EU RATES ROUNDUP: Curve Steepening May Ebb as Cash Flows Support

(Bloomberg) -- Recent supply-driven weakness in long-end creates potential for outperformance amid large positive cash flows in coming weeks, analysts write in client notes.
  • Barclays (strategists including Giuseppe Maraffino)
    • Risk-on mood has driven tightening in periphery EGB vs core spreads; political uncertainty not yet fully priced
    • Maintain short 50% 7Y Belgium, Ireland vs Netherlands and short 6Y Belgium vs. Austria; hold on to short duration bias via short bund ASWs vs EONIA, tactically pay 1Y1Y Eonia forward
    • Recommend buying RXU6 payers vs matched-maturity swaption payers as a conditional expression of short Bund ASW view
    • In gilts, recent rally has been driven by a richening of the 5Y-10Y sector, GBP 5s10s30s fly at unsustainably rich lvls; expect tactical paying of GBP 5s10s30s ahead of May MPC meeting
  • RBS (strategists including Giles Gale)
    • May see more ultra-long end supply following France’s 50Y issue; see tendency to reduce exposure to sector as convexity looks better value in 30Y maturity
      • Recommend 30s50s steepeners at -10.5bps, target +2bps, stop at -15bps
    • Large upcoming redemptions, coupons in France unlikely to have much impact; start of Japanese FY can bring supportive flows
      • OATs now yield more than USTs once adjusted for cross-currency basis; yield search driving investors into longer maturities; recommend 5s15s OAT flattener
    • Italy’s progress on Senate reform and initiative for banks should be positive for investors in Italy, reinforces bullish outlook on BTPs given ECB easing
  • JPMorgan (strategists including Fabio Bassi)
    • No fireworks expected from the ECB; hold longs in 3Y and 10s30s flatteners, recommend cheap hedges such as bund steepeners in front-end
    • Hold intra-EMU tactical tighteners; recommend underweight 10Y-15Y Italy as valuations are expensive, expect pressure from new 15Y syndication in coming weeks; open new shorts in 2Y Ireland vs France
    • DBRS expected to keep a stable outlook on Portugal
    • Recommend receiving June ‘16 ECB as cheap option on further ECB easing, stay neutral further out
  • Deutsche Bank (Francis Yared)
    • Valuations of core rates are rich, driven by low term premia in the U.S., low breakevens in Europe; supply/demand perspective remains favorable
    • Maintain key macro trades; long EUR 10Y breakevens, EUR 2s5s flatteners, stay neutral periphery
    • In the event of a vote in favor of Brexit, MPC may act sooner than currently priced in U.K. front-end; alternatively, money market curve should steepen aggressively should U.K. vote to stay in EU
      • Recommend August-December MPC dated steepeners
    • Front loading of gilt issuance ahead of referendum should result in some long-end concession; recommend short 50Y spreads into 2065 syndication
  • BNP (strategists including Patrick Jacq)
    • Maintain outright long exposure to EGB market as improvement in supply conditions should lead to a continuation of rally in the coming week
    • Large negative net supply for remainder of the month should push down bund implied premium, may lead to further 15bps rally
    • Long-end has now absorbed large amount of supply while front-end remains pinned; more positive bias will support curve flattening: MORE
  • Societe Generale (strategists including Marc-Henri Thoumin)
    • Recent OAT syndications have resulted in substantial long-end concession; recommend entering 10s30s OAT flatteners in ASW: MORE
  • Commerzbank (strategists including Christoph Rieger)
    • Still see scope to pare duration at current levels, looking to add at 10Y yields closer to 0.25%; core paper caught between supportive cash flows, headwinds from recovering risk sentiment in coming week
    • Maintain spread tightener expressed via Italy for coming weeks and are more cautious on Portugal: MORE
  • HSBC (strategists including Wilson Chin)
    • German flattener is at relatively attractive levels following recent EGB supply at the long-end, especially from France
    • Recommend buying 20Y DBR4 Jan. 2037, sell 5Y OBL0 April 2021: MORE
  • Citigroup (strategists including Harvinder Sian)
    • Expect new lows in bund yields aided by scarcity issues; peripheral EGBs face near-term headwinds from Brexit risk and Greek discussions but should ultimately see lower yields
    • Further ECB policy iterations are likely in Sept., which in turn locks down lower-for-longer and scarcity issues for bunds
    • Recommend GBP 2s5s steepener; target 50bps, stop 7bps, carry -0.9bp/3-mo
      • Simple expression of the idea that BOE hiking cycle is more likely than a cutting cycle, regardless of Brexit: MORE
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Giuseppe Maraffino (Barclays PLC)
Christoph Rieger (Commerzbank AG)
Fabio Bassi (JPMorgan Chase & Co)
Francis Yared (Deutsche Bank AG)
Giles Gale (Royal Bank of Scotland Group PLC)

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UUID: 7947283

HALISTER: Vodafone Unit Mulls Bid for South Africa State Broadband Company

Vodafone Unit Mulls Bid for South Africa State Broadband Company

(Bloomberg) -- Vodacom considering offer for unprofitable Broadband Infraco, CEO Shameel Joosub says in e-mailed comments.
  • Broadband Infraco had assets worth 2.1b rand as of March 2014, according to most recent audited financial report
  • Vodacom’s interest comes as S. Africa considers privatization of some state assets
  • Deal would make up for abandoned pursuit of Internet provider Neotel, Joosub says
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
VOD LN (Vodafone Group PLC)
VOD SJ (Vodacom Group Ltd)

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UUID: 7947283

HALISTER: In Disney Shakeup, Cost-Cutters Gaining Clout in Post-Staggs Era

In Disney Shakeup, Cost-Cutters Gaining Clout in Post-Staggs Era

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
DIS US (Walt Disney Co/The)

People
Thomas Staggs (Walt Disney Co/The)
Andrew Mooney (Fender Musical Instruments Corp)
Ben Sherwood (Walt Disney Co/The)
Bob Boyd (Pacific Mutual Holding Co)
D Bibb (MediaTech Capital Partners LLC)

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UUID: 7947283

HALISTER: Apple’s European Suppliers Drop on Report of IPhone Output Cut

Apple’s European Suppliers Drop on Report of IPhone Output Cut

(Bloomberg) -- Apple’s European suppliers fall after Nikkei Asian Review reported late Friday that slower-than-expected sales of iPhone 6S and 6S Plus have prompted Apple to reduce its orders, citing unidentified suppliers.
  • Dialog drops as much as 5%, AMS down 3.9%, Imagination Tech down 2.1%, STMicro drops 1.2%, Infineon falls 0.9%
  • ARM drops 3.2%; downgraded to hold from buy at Jefferies
    • Jefferies says data points suggest softening of smartphone chip pricing
    • Increase in ARM’s accrued licensing rev. in 2H15 may point to further slowdown in licensing growth, longer- term royalties
    • Mobile tailwind is less assured while new areas in networking, servers are more competitive and fragmented
  • NOTE: Semiconductor stocks fell on April 14 as TSMC forecast 2Q sales below ests.
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
AAPL US (Apple Inc)
IFX GR (Infineon Technologies AG)
STM IM (STMicroelectronics NV)
AMS SW (ams AG)
ARM LN (ARM Holdings PLC)

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UUID: 7947283