HALISTER1: EU CREDIT DAILY: Firm Into Earnings Season; Alcoa, StanChart

EU CREDIT DAILY: Firm Into Earnings Season; Alcoa, StanChart

(Bloomberg) -- Price action in cash credit markets in the past two weeks since this column was last published shows a generally positive picture across both EUR IG and HY cash corporate bonds, Bloomberg strategist Simon Ballard writes.
  • Risk appetite remains firm, even as modestly wider synthetic indexes seem to highlight the underlying issues that continue to test investors’ resolve; macroeconomic uncertainty, stock-price gyrations, oil-price volatility and the Q1 corporate earnings season that kicks off in the U.S. this week are all in focus
  • Secondary cash credit spreads underpinned; EUR IG cash spreads ~2bps tighter since beginning of April
    • EUR HY cash bonds ~11bps tighter month to date
  • Recent corporate new issuance has been generally well absorbed; no meaningful repricing effect on secondary market
  • Alcoa Inc. due to report 1Q16 earnings after U.S. market close
  • CDX IG +0.5bps at 82.07 in overnight session; iTraxx Asia Ex Japan IG is +0.7bps at 147.20
NEWS
  • Corporate News
  • Alcoa Looking to Finally Break Metal Shackles as Earnings Sink
  • HeidelbergCement Tanzania Unit’s FY Profit Rises 3% Y/Y
  • Formosa Chemicals 1Q Net Income NT$6.77b; Est. NT$5.53b
  • Financial News
  • Standard Chartered Said Selling $4.4 Billion of Asian Assets
  • Austria’s Carinthia Province, Heta Creditors to Meet in London
  • BBVA May Be Interested in Buying Second Bank in Turkey
  • HSBC, Citigroup Among Those Directly Investing in Saudi Stocks
  • Credit Rating News
  • Moody’s Pemex Cuts Are Ignored by Ratings Rivals, Bond Traders
  • Australia Starting to Push Against AAA Rating Boundary, NAB Says
  • Other News
  • Abenomics Rebuked as BlackRock Joins $46 Billion Japan Pullout
  • Panama Papers Have Unintended Consequences: Mohamed A. El- Erian
  • Carney’s ‘Brexit’ Headache Intensifies With Rate Outlook Schism
ANALYST VIEWS
  • We have to believe that the record lows in corporate yields and spreads will be tested: creditmarketdaily.com
NEW ISSUES
  • Digital Realty Trust EU600m 8Y MS +235
  • Peugeot EU500m 7Y 2.375%
  • 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)

Tickers
AA US (Alcoa Inc)

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HALISTER: Dutch Blood Testing Takes DuPont Teflon Safety Scare to Europe

Dutch Blood Testing Takes DuPont Teflon Safety Scare to Europe

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Source: BN (Bloomberg News)

Tickers
DD US (EI du Pont de Nemours & Co)

People
Daniel Turner (EI du Pont de Nemours & Co)
Robert Rabin (Board Of Trustees Of The Leland Stanford Junior University)
Sharon Dijksma (Kingdom of the Netherlands)

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HALISTER1: PHILIPPINES PREVIEW: Exports Probably Declines for 11th Month

PHILIPPINES PREVIEW: Exports Probably Declines for 11th Month

(Bloomberg) -- Weak global demand probably means Philippines’ exports fell for the 11th consecutive month in February, according to economists.
  • Exports probably fell 3.2% y/y following a 3.9% contraction in Jan., median est. in Bloomberg survey shows; range of ests. is from -7.0% to +1.7%; data due at 9am local time tomorrow
  • Jan. exports surprised with a 3.9% y/y decline vs median est. of a 0.4% expansion, data released March 10 showed
  • Coconut oil exports fell 8.08% y/y in the first two months of this year, industry group reported on April 8, citing El Nino effect on supply of raw materials
  • USD/PHP down 0.1% to 46.080 today
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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HALISTER1: INDIA RATINGS: Bhilai, Shri Krishna Cut; Maithan Ispat Raised

INDIA RATINGS: Bhilai, Shri Krishna Cut; Maithan Ispat Raised

(Bloomberg) -- Here’s a roundup of debt-rating changes of Indian cos. To get this story sent to your inbox real-time, run NI INRATINGS , click on Display & Edit, then Set Alert Delivery. DOWNGRADES
  • Bhilai Engineering Corp
    • Long term rating cut to D from BB+ at Crisil
    • Cites devolvement of letters of credit due to delay in release of fertilizer subsidies, stretch in working capital cycle
  • Shri Krishna Paper Mills & Industries
    • Long term rating cut to D from C+ at ICRA
    • Cites delay in debt servicing because of continued liquidity issues faced by co.
  • West Quay Multiport
    • Long-term bank facilities cut to D from B at CARE
    • Cites delay in servicing debt obligations due to weak liquidity position
UPGRADES
  • Maithan Ispat
    • Long-term bank facilities raised to BBB- from D at CARE
    • Cites credit enhancement from ‘unconditional’ and ‘irrevocable’ guarantee of Mideast Integrated Steels
  • Stonemen Crafts India
    • Long term rating raised to BB+ from BB at ICRA
    • Cites ‘healthy’ growth in scale, modest working capital cycle
  • Vallabh Market
    • Long-term bank facilities raised to B- from C+ at ICRA
    • Cites record of regular repayments of debt obligations
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
BEC IN (Bhilai Engineering Corp Ltd)
BRCM IN (Balrampur Chini Mills Ltd)
0896996D IN (Broadcast Engineering Consultants India Ltd)
GRMO IN (GRM Overseas Ltd)
0489204D IN (Jaina Mobile India Pvt Ltd)

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HALISTER1: MACRO VIEW: An Island of Value

MACRO VIEW: An Island of Value

(Bloomberg) -- Once upon a time currencies were designed to be a store of value. An investor could have faith that a central bank issuing notes and coins would do its best to maintain their value. But, the Lehman crisis came along and central bank text books were thrown out of the window. |
  • Still, in Asia there is a place where they understand the value of a strong, stable currency
  • Singapore’s central bank meets this week and the odds favor a retention of the modest and gradual appreciation path of the currency; part of its unique way of setting monetary policy
  • It is serving the country well; since the depths of the global crisis in 1Q 2009 the Singapore dollar’s nominal effective exchange rate had risen around 16% by end-March; click here for chart
  • Careful exchange-rate management is helping to bring Singapore a variety of benefits;
    • Singapore is now the world’s third-largest financial center
    • The country is a big player in global wealth management: last week one of the local banks announced it is swallowing the Asian private banking arm of a U.K. competitor
    • Singapore punches above its weight on the international stage, notably at G-20 and IMF discussions
  • Financial safe havens are becoming harder to define in the age of quantitative easing and negative interest rates, but this island with a AAA credit rating still qualifies.
  • NOTE: Mark Cranfield is an FX strategist who writes for First Word. 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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HALISTER: Corporate France Bracing for Le Freeze as Elections Loom

Corporate France Bracing for Le Freeze as Elections Loom

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
AF FP (Air France-KLM)
ORA FP (Orange SA)

People
Marine Le Pen (Natl Front Party)
Alexandre Juniac (Air France-KLM)
Emmanuel MacRon (French Republic)
Francois Hollande (French Republic)
Manuel Valls (French Republic)

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HALISTER1: INDIA CPI PREVIEW: USD/INR May Be Range-Bound If CPI Meets Est.

INDIA CPI PREVIEW: USD/INR May Be Range-Bound If CPI Meets Est.

(Bloomberg) -- USD/INR may continue to trade between 200-DMA and 100-DMA in near term if India’s March CPI data match economists’ estimate, Bloomberg strategist David Finnerty writes.
  • CPI will rise 5.00% y/y last month after 5.18% gain in Feb. according to median est. of economists in Bloomberg survey; ests. range from 4.80% to 5.24%; data due at 5:30pm local time tomorrow; Feb. industrial production also due tomorrow; est. 1.0% y/y vs 1.5% decline in Jan.
  • RBI could stay on hold at least in short term, while it watches effects of its rate cut earlier this month as well as whether monsoon season leads to an uptick in food prices; RBI could also monitor if 7th Pay Commission award spurs increased domestic spending that may further mitigate CPI’s downtrend
  • Rupee strength since beginning of March has been aided by Fed’s dovish stance, and with few expectations of U.S. Fed rate hike this month, INR is unlikely to weaken
  • NOTE: David Finnerty is an FX 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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HALISTER1: INSIDE ASIA: China Raises Yuan Rate as PPI Advances on Month

INSIDE ASIA: China Raises Yuan Rate as PPI Advances on Month

(Bloomberg) -- The yuan gains after PBOC raises the reference rate by the most since March 31 as consumer inflation gained last month.
  • China CPI index up 2.3% on year, while the producer price index posted the first month-on-month increase since 2013
    • Chinese inflation may remain near current levels for the rest of the year, which would suggest that it won’t “become a constraint on policy in the near future,” according to Capital Economics China economist Julian Evans-Pritchard
    • Onshore & offshore yuan both advance; PBOC raises yuan fixing by 0.13% to 6.4649; Premier says economy better than expected in 1Q: state TV said late on Friday
  • Asian currencies advance, with ringgit and won gaining the most
    • Yen rises for seventh day against dollar with government data showing Feb. machine order fell a less-than- expected 9.2% previous month; median estimate was for a 12.0% decline
    • Ringgit rises ahead of industrial production data; Data may show it rose 3.8% from year earlier in February, highest since October: Bloomberg survey; Malaysia says China’s bond purchases help spur ringgit: Star
    • Rupiah gains; Bank Indonesia expects $400m trade surplus in March: Daily; World Bank cuts 2016 GDP growth estimate for Developing East Asia to 6.3% from October estimate of 6.4%, with Indonesia growth forecast cut by 0.2pps to 5.1%
  • Aussie and Kiwi both declined; Australia’s home loans rose 1.5% from previous month in February; missing median estimate of a 2.0% gain
    • New Zealand’s retail card spending increased 0.1% from previous month in March, least since December; median estimate was for 0.3% gain
    • Taiwan’s dollar weakens; data today will show island’s exports fell 9.5% in March after 11.8% decline in February while trade surplus widened to $4.31b, most since October: Bloomberg surveys
  • U.S. Treasuries little changed, with yield on 10-year bonds at 1.710% in Asian trading; Atlanta Fed cut its U.S. 1Q GDP est. for third time in two weeks
  • IMF says some central banks support negative policy rates
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Julian Evans-Pritchard (Capital Economics Asia Pte Ltd)

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