HALISTER: Citigroup 1Q Adj. EPS, Rev. Beat Ests.

Citigroup 1Q Adj. EPS, Rev. Beat Ests.

(Bloomberg) -- Citigroup 1Q adj. EPS $1.10, est. $1.03.
  • 1Q adj. rev. $17.55b, est. $17.5b
  • NIM 2.92%
  • While market-sensitive products “clearly suffered” in qtr, C continued to make progress in “key areas"; grew loans, deposits in core business, cut expenses while abosorbing ‘‘significant’’ repositioning charge: CEO Michael Corbat
    • Citi Holding assets down 10% from yr end, was profitable; as accounts for such a small pctg of balance, will no longer report results separately after this yr
  • 1Q fixed income trading rev. $3.09b vs est. $2.97b (Bloomberg survey of 6 ests.)
    • Equities $706m vs est. $731m
  • I-banking rev. of $875m vs the est. $906.7m (Bloomberg survey of 6 ests.)
  • 1Q oper expenses $10.5b vs $11.1b
    • Lower Citi Holdings expenses, legal costs, FX impact were partially offset by higher repositioning costs, investments in Citicorp
    • Legal expenses $166m vs $388m y/y; repositioning $491m vs $16m y/y
    • Net loan loss reserve build $233m, primarly related to energy vs release $239m y/y
  • Allowance for loan losses $12.7b at qtr end, 2.07% of total loans vs $14.6b, or 2.38% of total, y/y
  • Tier 1 common ratio 12.3% vs 12.1% q/q; SLR 7.4% vs 7.1%
  • BV $71.47; tangible book $62.58
  • Follow our TOPLive blog for real-time news, analysis on C earnings starting at 7:50am here
  • Call 11am, 866-516-9582, password 55563196
Banks preview: {NSN O5OA906KLVS9 }
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
C US (Citigroup Inc)

People
Mike Corbat (Citigroup Inc)

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UUID: 7947283

HALISTER1: Tactically Cautious EUR Duration; Italy Tightener: Commerzbank

Tactically Cautious EUR Duration; Italy Tightener: Commerzbank

(Bloomberg) -- Still see scope to pare duration at current levels, looking to add at 10y yields closer to 0.25% with core paper caught between supportive cash flows and headwinds from recovering risk sentiment in coming weeks, Commerzbank strategists including Christoph Rieger write in client note.
  • Bunds are exhibiting resilience in the face of recent equity gains and the hefty French ultra-long supply
  • Risk/reward for inflation breakevens remains attractive and suggest adding on any setbacks that may be seen next week on lower oil prices expected after this weekend’s OPEC meeting
  • Maintain spread tightener expressed via Italy for coming weeks and are more cautious on Portugal
    • Cash flows from Italy and Spain total almost EU80b, while Portugal will only see ~EU0.7b of coupon payments next week
    • 10y BTP/bund spread should remain within a rough range of 100-150bp, closer to the lower end in coming weeks and higher into summer
    • Debate about sovereign risk-weights has the potential to limit the downside to spreads longer-term
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Christoph Rieger (Commerzbank AG)

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UUID: 7947283

HALISTER: Aeroflot’s Transaero Jet-Rush to Crimp Airbus, Boeing Orders (1)

Aeroflot’s Transaero Jet-Rush to Crimp Airbus, Boeing Orders (1)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
BA US (Boeing Co/The)
AFLT RM (Aeroflot - Russian Airlines PJSC)
AIR FP (Airbus Group SE)
TAER RM (Transaero Airlines)

People
Giorgio Callegari (Aeroflot - Russian Airlines PJSC)
Maxim Sokolov (Alpinex Asset Management AG)

Topics
CEO Interviews

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UUID: 7947283

HALISTER1: Use Long-End OAT Cheapening to Enter 10s30s Flatteners: SocGen

Use Long-End OAT Cheapening to Enter 10s30s Flatteners: SocGen

(Bloomberg) -- Recent OAT syndications have resulted in substantial long-end concession; recommend entering 10s30s OAT flatteners in ASW, SocGen strategist Marc-Henri Thoumin writes in client note.
  • Despite weakness in OATs, longer duration in core has remained resilient
  • Massive inflows in April, larger PSPP sovereign bond buying should favor sustained demand for duration
  • In France, EU48b of coupons and redemption payments on April 25 should spur a reversal of significant cheapening this week
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Marc-Henri Thoumin (Societe Generale SA)

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UUID: 7947283

HALISTER1: Expect New Lows in Bund Yields on Bond Scarcity, Citigroup Says

Expect New Lows in Bund Yields on Bond Scarcity, Citigroup Says

(Bloomberg) -- 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 trade lower in yield, Citigroup strategists including Harvinder Sian write in a client note.
  • Unlikely that the temporary end of Chinese deflation will see ECB staff projections revert to mandate consistent inflation
  • Further ECB policy iterations are likely in Sept. which in turn locks down lower-for-longer and scarcity issues for bunds
  • Other rates ideas from Citigroup:
  • Buy Bundei46 break-even vs OATei40; target -4bp, stop -18bp
    • OATei will contend with supply pressure with upcoming April 21 auction
    • Risk emerges from further flattening of the 10s30s breakeven curve
    • Alternatively, consider expressing this view in real yields
  • GBP 2s5s steepener; target 50bp, stop 7bp, carry -0.9bp/3- mo.
    • Simple expression of the idea that BOE hiking cycle is more likely than a cutting cycle, regardless of Brexit
    • Risk is that the front-end and inflation expectations recouple via a reversal in the latter possible if this weekend’s OPEC meeting disappoints market expectations
  • EUR rates bottom-right vega expected to remain range-bound, see more here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Harvinder Sian (Citigroup Inc)

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UUID: 7947283