HALISTER1: PREVIEW: UST WI 3Y Yield Above Previous Auction Stop

PREVIEW: UST WI 3Y Yield Above Previous Auction Stop

(Bloomberg) -- Current 3Y yield lower by 4.9bp at 1.023% before 1pm ET auction, 15th straight at $24b; WI 3Y bid at about 1.040%, above 3Y auction stops since 1.174% in Jan.
  • Most recent 3Y auction on Feb. 9 drew 0.844%, 0.7bp above WI yield at deadline and first to tail since June 2014, according to Stone & McCarthy; bid-to-cover was lowest since July 2009
  • Current 3Y yield Feb. 11 touched 0.695%, lowest since Oct. 2014, amid selloff in European stocks, peripheral euro-zone bonds and WTI crude; it rebounded to 1.075% yday amid gains for risk assets
  • 18 of past 20 3Y auctions stopped through by as much as 1.1bp, according to Stone & McCarthy; year-ago auction stopped through by 0.9bp
  • 6-auction averages:
    • Bid-to-cover: 3.00 (low 2.74, high 3.23)
    • Dealer award: 38.6% (low 27.8%, high 44.1%)
    • Direct award: 12.9% (low 8%, high 18.6%)
    • Indirect award: 48.5% (low 40.8%, high 62.9%)
  • Maturing 3Y has $32b outstanding
  • Primary dealers’ position in 2Y-3Y sector in week ended Feb. 24 was net short $5.12b vs $5.91b avg net short over past year
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: BRL Gains May Provide Opening for BCB to Cut Rates in 2H: Fibra

BRL Gains May Provide Opening for BCB to Cut Rates in 2H: Fibra

(Bloomberg) -- BRL may close 2016 at 3.90/USD vs 3.9608 in 2015, helping to ease inflation and opening room for BCB to cut rates, Cristiano Oliveira, chief-economist at Banco Fibra says in a phone interview.
  • Slight rise in forecast compares to 33% plunge in 2015, when FX move helped to pressure inflation rise of over 10% y/y
  • Current account shrinking deficit, broad weakening trend for USD and local high rates behind improving outlook for BRL
  • The “political scenario is only a catalyst for real gains”
  • Output gap amid deep recession also may contribute to slow inflation
    • “BCB does not look only at inflation, but also activity”
    • BCB policy from 2H is likely to focus on 2017 inflation, which may be closer to the target; Oliveira forecasts 5.00/5.50% CPI next year
    • BCB may start cutting in July; Selic to close 2016 at 11.75%/12.25% vs current 14.25%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Cristiano Oliveira (Banco Fibra SA)

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UUID: 7947283

HALISTER1: Odebrecht Ex-CEO Gets 19 Years in Jail in ‘Carwash’: Statement

Odebrecht Ex-CEO Gets 19 Years in Jail in ‘Carwash’: Statement

(Bloomberg) -- Marcelo Odebrecht senteced to 19 years and 4 months in jail for corruption, money laundering and criminal association, according to judge statement today.
  • Former Odebrecht directors Marcio Faria and Rogerio Santos were also sentenced to 19 years and 4 months in jail
    • Alexandrino Alencar sentenced to 15 years, 7 months and 10 days
  • NOTE: Marcelo Odebrecht and OAS former CEO Leo Pinheiro are negotiating a joint collaboration through plea bargain deals with Brazilian authorities investigating the graft scheme Carwash, Globo newspaper reported today
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ODBE4 BZ (Odebrecht SA)

People
Marcelo Odebrecht (Odebrecht SA)

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UUID: 7947283

HALISTER1: Matt Levine's Money Stuff: Bonuses, Taxes, Weed and Gangs

Matt Levine's Money Stuff: Bonuses, Taxes, Weed and Gangs

Alert: HALISTER1
Source: BV (Bloomberg View)

People
Thomas Dinapoli (State of New York)
Curtis Schilling (ESPN Inc)
David Rubenstein (Duke University)
Gary Shapiro (Consumer Electronics Association)
Richard Schaeffer (Liquid Holdings Group Inc)

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UUID: 7947283