HALISTER1: European Govt Bond Index Extensions Supportive for OATs: Citi

European Govt Bond Index Extensions Supportive for OATs: Citi

(Bloomberg) -- Effective duration for European Govt Bond Index is expected to increase by 0.11y at the end of April, Citigroup strategists Saumesh Dutta and Aman Bansal write in client note.
  • Increase is above median change over past 5 yrs, though in- line with the recent April changes
  • Weighted duration change, the most relevant measure, should be most supportive for France
  • Among individual country indexes, largest extensions are for Finland, the Netherlands and France
    • Changes to be supportive for 10Y Finland, 30Y Netherlands, France
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aman Bansal (Citigroup Inc)
Saumesh Dutta (Citigroup Inc)

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UUID: 7947283

HALISTER1: Singapore’s 2-Year Swap Heads for Biggest Advance Since 2011

Singapore’s 2-Year Swap Heads for Biggest Advance Since 2011

(Bloomberg) -- SGD 2-yr interest-rate swap surges 15bps to 1.6700%, poised for steepest advance since Aug. 2011, following an unexpected easing of the central bank’s currency policy.
  • Ten-yr IRS rises 9 bps to 2.4150%
  • MAS’s decision is expected to reverse recent downtrend in swap-offer rate, according to note today from HSBC
    • Move will support HSBC’s yr-end forecast of 2.00% for 6- mo. SOR
    • Maintains 2-, 10-yr IRS flattener to target 45 bps
    • Long-end of swap curve likely to be anchored against backdrop of lower G-3 rates even as short-dated swap rates are biased higher
  • Six-month SOR, floating leg of SGD IRS, has dropped 62 bps this year and was 1.21817% yesterday; rate computed based on USD/SGD forwards and USD Libor
    • Six-mo. USD/SGD implied yield currently +28 bps, indicating a higher fixing of SOR today; both rates have a correlation of 0.92, based on monthly changes in the past five years
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: Limited RV in 10Y Ireland, Value vs France

AUCTION PREVIEW: Limited RV in 10Y Ireland, Value vs France

(Bloomberg) -- Ireland to tap 1% 05/2026 bonds for EU750m at 11am CET; analysts see recent underperformance vs France, reduced size as supportive, despite lack of curve concession.
  • SocGen (Marc-Henri Thoumin)
    • 10Y bond stable ahead of supply, experiencing no pre- auction discount; still cheaper vs short-dated bonds as a result of unstable risk sentiment, may flatten if sentiment improves
    • Cross-market has underperformed 10Y OATs recently, while 5Y has been more resilient, expect this to converge post-auction; Ireland fundamentals seen as supportive
  • Commerzbank (David Schnautz)
    • Decision to auction 10Y instead of 30Y, reduced size, should prove supportive
    • Recent 10Y underperformance vs France, Italy argues for smooth sale today
    • Only one more auction in 2Q bodes well for solid post- supply recovery, before EU referendum becomes main driver of Irish spreads
  • Mizuho (Antoine Bouvet)
    • Bond trades expensive on the Irish fitted curve, has performed well recently in RV; Irish spread to France has suffered since the beginning of the month, back at wide spreads seen in Feb.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Marc-Henri Thoumin (Societe Generale SA)
Antoine Bouvet (Mizuho Financial Group Inc)
David Schnautz (Commerzbank AG)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Sentiment Buoyant; Casino Sales Rise, Fortescue

EU CREDIT DAILY: Sentiment Buoyant; Casino Sales Rise, Fortescue

(Bloomberg) -- Credit markets stay resilient on back of China data and corporate earnings, but trading volume in the secondary markets remains muted, Bloomberg strategist Simon Ballard writes.
  • Higher Asian equities may lift European credit markets at open; Singapore central bank’s surprise easing will create a further fillip to risk sentiment
  • Bank of England rate decision on macro radar today; no rate change expected given recent anemic economic data and EU referendum uncertainty
  • Small pick-up in volatility element of Risk Appetite model, but spread dispersion appears firmly anchored
  • CDX IG currently +0.8bps at 79.02 in overnight session; iTraxx Asia Ex Japan IG is currently -2.5bps at 139.00
NEWS
  • Corporate News
  • Unilever 1Q Underlying Sales Growth Slightly Above Estimate
  • Burberry Sees Tough Luxury Outlook as Second-Half Revenue Slips
  • Mothercare Says FY16 Overall Profit Within Range of Estimates
  • Debenhams 1H Pretax up 5.5%; On Track For FY Profit
  • Casino French Sales Rise on Growth at Hypermarkets
  • Nestle 1Q Organic Sales Growth Beats Ests., Confirms Outlook
  • Sodexo 1H Rev. In Line, Adj. Oper. Profit Misses, Keeps Forecast
  • Nintendo Jumps Most in 3 Weeks After Outlooks for Miitomo Sales
  • Fortescue Says War Chest for Cutting Debt Swells to $1.5 Billion
  • Financial News
  • Deutsche Bank Found ‘Systemic’ Failure Behind Russia Cash Flight
  • Bendigo & Adelaide Bank 3Q Net Interest Margin 2.19%
  • Swiss Re, L&G Said to Mull Bids for Deutsche Bank Abbey Life
  • ANZ Bank to Reinstate 4 Employees Stood Down Amid Rates Probe
  • Credit Rating News
  • Australia’s AAA credit warning at risk unless Turnbull government raises taxes: Moody’s
  • Valeant Pharma Rating Cut to B From B+ by S&P; on Watch Dev
  • S&P Lowers Peabody Energy Rtgs To ’D’ On Chapter 11 Filing
  • Other News
  • Japan’s Biggest Bank Criticizes BOJ Policy for Fueling Anxiety
ANALYST VIEWS
  • Secondary market corporate spread tightening has stalled of late... Maybe the high level of issuance hasn’t been repricing the market wider, but it appears to have limited the amount spreads would have tightened otherwise: creditmarketdaily.com
NEW ISSUES
  • Allianz EU1.5b 4Y, 15Y Bonds
  • BPCE EU750m 10Y Tier 2 MS +245
  • Carrefour Banque EU500m 5Y FRN 3mE +68
  • Deutsche PBB EU500m 19Y Covered MS +25
  • Eika Boligkreditt EU500m 7Y Covered MS +24
  • Enexis Holding EU500m 10Y MS +45
  • ESM EU3b 8Y MS -14
  • FMS Wertmanagement $400m 1/2018 FRN Tap 3mL +11
  • KBN EU1b 10Y MS +9
  • Kennedy Wilson Europe EU150m 3.25% 2025 Tap MS +255
  • Nationwide BS GBP750m 3Y Covered FRN 3mL +48
  • Land NRW EU1.25b 10Y MS Flat
  • Poland EU750m 2.375% 1/2036 Tap MS +125
  • European IG credit pipeline here and HY credit pipeline here
  • Issuers exposed to S-T rollover and interest-rate reset risk here
  • NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Korean Won, Ringgit, Taiwan Dollar Forwards Most Active on DTCC

Korean Won, Ringgit, Taiwan Dollar Forwards Most Active on DTCC

(Bloomberg) -- USD/KRW non-deliverable forwards account for 29.4% of total volume today, according to trades reported to DTCC; USD/MYR second-most active at 19.2%, USD/TWD third at 13.4%.
  • Notional amounts traded include:
    • $150m of USD/KRW at 1,147.53; matures May 31
  • Total volume was $10.1b as of 2:40pm HKT; global total yesterday was $56.9b, with USD/BRL accounting for 21.8%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Westpac bank to exit Nauru after Pacific state gains entry into IMF, World Bank

Westpac bank to exit Nauru after Pacific state gains entry into IMF, World Bank

Alert: HALISTER1
Source: AUB (Australian Broadcasting Corporation)

Tickers
13347Z US (International Monetary Fund)

People
Christine Lagarde (International Monetary Fund)
Marcus Stephen (Republic of Nauru)

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UUID: 7947283