HALISTER1: EMU Spreads to Tighten Even as Politics Spurs Volatility: GS

EMU Spreads to Tighten Even as Politics Spurs Volatility: GS

(Bloomberg) -- Expect EMU peripheral yields, spreads to stay supported in April on the back of the favorable liquidity backdrop engineered by the ECB, Goldman Sachs analyst Rohan Khanna writes in client note.
  • Volatility will likely stay elevated on the tug-of-war of between supportive flows and idiosyncratic, political ‘shocks’
  • In April, negative net bond supply is seasonally higher, helping to keep yields anchored, as well as being technically supportive of intra-EMU spread compression
  • Fundamental picture is shifting with growth momentum and a possible bottoming out of inflation potentially constraining or reversing the rally in core markets; further ECB easing unlikely, developments in Spain, Portugal and Italy may lead to idiosyncratic widening while the U.K. referendum likely to be a‘risk-off’ event for European assets
  • NOTE: Cash-flows trump political risk, analysts say; see roundup here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Rohan Khanna (Goldman Sachs Group Inc/The)

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UUID: 7947283

HALISTER: Barclays Plans to Sell About $15 Billion Italy Loans in 2 Years

Barclays Plans to Sell About $15 Billion Italy Loans in 2 Years

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
BARC LN (Barclays PLC)
MB IM (Mediobanca SpA)
BKT SM (Bankinter SA)

People
Alberto Nagel (Mediobanca SpA)
Alessandra Perrazzelli (Barclays PLC)
Anna Benassi (Kepler Capital Markets/Zurich)
Enrico Cuccia (Mediobanca SpA)
Gian Sichel (Chebanca! SpA)

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UUID: 7947283

HALISTER1: UST MORNING CALL: ‘Market Likely Vulnerable to Further Squeezes’

UST MORNING CALL: ‘Market Likely Vulnerable to Further Squeezes’

(Bloomberg) -- “Aside from new shorts in FV and TY, TU shorts were only barely trimmed,” which “leaves the market likely vulnerable to further squeezes with the biggest change in the TY,” BMO strategist Aaron Kohli says in note.
  • “Part of the positions move is a likely effect of investors’ renewed confidence after quarter-end and stability in risk markets. Still, the new shorts present a risk to a further rally in rates especially if risk markets start to look weak”
  • Other observations from strategist morning notes:
  • FTN (Jim Vogel): “Cash that was on hold for a signal from the Fed seeps into the bond market almost every day now”
  • Marty Mitchell (independent): “Momentum is overbought in equities and in the bond market and that should act as a governor on further upside in both sectors until those studies can correct from those overbought extremes”
    • “If we don’t get an upside correction in yields into the auctions, then the chances grow that we will get that correction after the auctions (due to weak demand)”
  • Seaport Global (Tom di Galoma): “Yield curve steepening and the start of Japanese new fiscal year in April should provide the necessary bid for the auctions to go well this week”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
Jim Vogel (Ftn Financial)
Marty Mitchell (The Mitchell Market Report LLC)
Tom Di Galoma (Seaport Group LLC/The)

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UUID: 7947283

HALISTER: Volkswagen’s Management Bonuses Targeted in Scandal Fallout

Volkswagen’s Management Bonuses Targeted in Scandal Fallout

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
VOW GR (Volkswagen AG)
8810Z US (University of Michigan)
BMW GR (Bayerische Motoren Werke AG)

People
Bernd Osterloh (Volkswagen AG)
Christine Hohmann-Dennhardt (Volkswagen AG)
Erik Gordon (University of Michigan)
Hans Poetsch (Porsche Automobil Holding SE)
Karlheinz Blessing (Volkswagen AG)

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UUID: 7947283

HALISTER: Canadian Pacific Ends Effort to Merge With Norfolk Southern

Canadian Pacific Ends Effort to Merge With Norfolk Southern

(Bloomberg) -- Canadian Pacific pulls the plug on its push to buy Norfolk Southern, including withdrawal of resolution asking NSC holders to vote in favour of good-faith negotiations.
  • Comes after latest hurdle on Friday when U.S. Dept of Justice opposed Canadian Pacific’s petition for voting trust, Link
Statement:Link
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
NSC US (Norfolk Southern Corp)
CP CN (Canadian Pacific Railway Ltd)

Topics
Management Changes
Who's News - People

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UUID: 7947283