HALISTER1: BRL Drop Reflects Fear of Policy Change With Lula: Mizuho

BRL Drop Reflects Fear of Policy Change With Lula: Mizuho

(Bloomberg) -- Investors see risk of government resorting to an economic policy shift in a last-ditch attempt to save President Rousseff’s mandate, Luciano Rostagno, chief strategist at Banco Mizuho do Brasil says in a phone interview.
  • BRL may drop back to 4.00/USD in event the reports are confirmed
    • BCB president Tombini may leave his post following Rousseff invitation for her predecessor Lula to assume one of the ministries, Valor says, adding that Lula back to government could lead to major changes in policies, with impact in rates and FX
  • “The report shows that the government may be having a shift to the left,” Rostagno says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Luciano Rostagno (Banco Mizuho do Brasil SA)
Alexandre Tombini (Financial Stability Board)
Luiz Da Silva (Federative Republic of Brazil)

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UUID: 7947283

HALISTER1: RATES: ‘Still More Room for Outperformance’ in TIPS, TD Says

RATES: ‘Still More Room for Outperformance’ in TIPS, TD Says

(Bloomberg) -- There’s value in owning TIPS breakevens, “particularly out the curve,” amid gradually firming underlying inflation fundamentals, recovering oil prices recovering, and rebounding U.S. growth momentum, TD strategists led by Priya Misra say in note.
  • Other positives for BEs include strengthening CPI fundamentals, Fed concern about low survey-based inflation expectations, and lower TIPS supply
  • 5y5y BEs are “cheap” as “much of the recent increase in BEs can be explained by the move higher in oil, financial conditions, and short rates”
  • TD recommends long 10Y breakevens and 5/30 breakeven curve steepeners; “any auction-related underperformance” at tomorrow’s $11b 10Y TIPS reopening provides opportunity for these positions
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Priya Misra (TD Securities USA LLC)

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UUID: 7947283

HALISTER: Munich Re Rebels Against ECB With Plan to Store Cash in Vaults

Munich Re Rebels Against ECB With Plan to Store Cash in Vaults

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
2539Z GR (European Central Bank)
MUV2 GR (Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen)

People
John Cryan (Deutsche Bank AG)
Mario Draghi (European Central Bank)
Nikolaus Bomhard (Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen)
Oliver Baete (Allianz SE)

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UUID: 7947283