HALISTER1: RATES: ‘Treasuries Ignoring Equities’ Because of ECB, TD Says

RATES: ‘Treasuries Ignoring Equities’ Because of ECB, TD Says

(Bloomberg) -- UST yields have lagged the rebound in S&P 500 over last two weeks because of “lingering concerns about U.S. growth momentum” and “the pricing in of an ECB easing,” which has weighed on German yields, TD strategists led by Priya Misra say in note.
  • While yield move accelerated this week, “the sensitivity of the 10yr to equities is still low,” and lower still for 1y1y rates
  • Market is pricing in next Fed rate hike in Dec. 2016, “and only looking for 22bp of hikes” from Dec. 2016 to Dec. 2017
  • Expected ECB easing measures are not yet priced in; German 10Y yield should be negative by end of March, which along with other low global bond yields will “effectively cap longer-dated Treasury rates”
  • 5s30s curve flattener recommended in Sept. is upsized at 132bp
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

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UUID: 7947283

HALISTER1: Brazil Supreme Court Approves Charges Against Cunha

Brazil Supreme Court Approves Charges Against Cunha

(Bloomberg) -- Brazil Supreme Court accepted criminal charge based on corruption and money laundering accusations against the speaker of lower house Eduardo Cunha, said the head of the court Ricardo Lewandowski.
  • NOTE: Yday, a majority of Supreme Court justices voted to accept charges vs Cunha
  • All 10 justices examining case voted to accept criminal charges
  • According to leading vote, accusations before 2009 will not be considered
  • NOTE: Cunha has said he’s innocent and didn’t commit any wrongdoing
  • NOTE: Criminal charge partially accepted by Supreme Court was presented by prosecutor-general Rodrigo Janot in Aug.
  • NOTE: Janot’s charges sought guilty verdict for Cunha for allegedly receiving $5m in kickbacks from the corruption scheme in Petrobras
  • Supreme Court still has to decide on other pending requests from Janot against Cunha
    • On Oct. 16, Janot asked Court to open separate investigation on alleged undeclared bank accounts in Switzerland
    • On Dec. 16, Janot requested to remove Cunha from his office as speaker in lower house
    • Janot asked Court on Feb. 24 to open another investigation against Cunha based on alleged kickbacks linked to Carioca Engenharia in Porto Maravilha project
  • NOTE: Justice Luiz Fux didn’t vote because he’s not in Brazil this week
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PETR4 BZ (Petroleo Brasileiro SA)

People
Eduardo Cunha (Federative Republic of Brazil)
Enrique Lewandowski ((BRA)Federal Supreme Court)

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UUID: 7947283

HALISTER: Apple Supporters Weigh In, From Big Tech to a Terror Victim

Apple Supporters Weigh In, From Big Tech to a Terror Victim

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
AAPL US (Apple Inc)
MSFT US (Microsoft Corp)
005930 KS (Samsung Electronics Co Ltd)

People
Bradford Smith (Microsoft Corp)
Dan Boneh (Board Of Trustees Of The Leland Stanford Junior University)
Sheri Pym ((US)Dist Court:)

Topics
Turkey Breaking Market News

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UUID: 7947283

HALISTER1: RATES: ‘Rally Potential Is Not Over’ for USTs, Citi Says

RATES: ‘Rally Potential Is Not Over’ for USTs, Citi Says

(Bloomberg) -- Fed “made a policy error” reflected in flatter curve, “and is now also trapped by falling inflation expectations and higher risk of recession,” Citi strategists Harvinder Sian and Jabaz Mathai say in note.
  • “The mini-Japanification of the USD yield curve is not complete, so we see scope for rates to fall even further”
    • 10Y USTs “are carving out a new lower yield range” with 1.5%-2% fair levels, though they’ll move lower “if the Fed is proven to be in a bind”
  • Sub-1% 10Y UST yields would indicate a recession probability higher than 50%; there isn’t one priced into curve at current levels
  • Citi recommends buying 1y into 10y call spreads on UST 30Y
    • Trade positions “for a lower rate structure” and is preferable to swaptions despite offering less liquidity because 30Y swap spreads are at about -53bp
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Harvinder Sian (Citigroup Inc)
Jabaz Mathai (Citigroup Inc)

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UUID: 7947283

HALISTER: Telecom Italia CEO Said to Be at Risk as Vivendi Seeks Revamp

Telecom Italia CEO Said to Be at Risk as Vivendi Seeks Revamp

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
VIV FP (Vivendi SA)
TIT IM (Telecom Italia SpA)
TIMP3 BZ (Tim Participacoes SA)
BOL FP (Bollore SA)

People
Marco Patuano (Telecom Italia SpA)
Arnaud Puyfontaine (Vivendi SA)
Vincent Bollore (Bollore SA)
Xavier Niel (Iliad SA)

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UUID: 7947283