HALISTER1: Italian Bank Group Urges Considering Scrapping EU500 Banknotes

Italian Bank Group Urges Considering Scrapping EU500 Banknotes

(Bloomberg) -- ABI banking group chief Antonio Patuelli tells reporters in Rome that European Union financial institutions should consider taking EU500 banknotes out of circulation
  • Says EU500 banknotes “are an easy tool for money laundering”
  • NOTE: Feb. 15, ECB is considering the possibility of eliminating EU500 note to fight crime, president Mario Draghi said.
  • NOTE: Feb. 12, Eurogroup President Jeroen Dijsselbloem warned of risk that large notes can be used for terrorism financing
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Jeroen Dijsselbloem (Kingdom of the Netherlands)
Mario Draghi (European Central Bank)

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UUID: 7947283

HALISTER: French Bank Earnings Signal Strength, Risks Clouding Outlook (1)

French Bank Earnings Signal Strength, Risks Clouding Outlook (1)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
BNP FP (BNP Paribas SA)
GLE FP (Societe Generale SA)

People
Christian Sole (Candriam Belgium SA)
John Cryan (Deutsche Bank AG)
Jonathan Fearon (Standard Life PLC)
Julian Chillingworth (Rathbone Unit Trust Management Ltd)
Karim Bertoni (Bellevue Asset Management AG/Switzerland)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: Test for 5Y Gilts; Cheap in RV, Asset Swap

AUCTION PREVIEW: Test for 5Y Gilts; Cheap in RV, Asset Swap

(Bloomberg) -- U.K. to auction 1.5% 01/2021 gilt for GBP3.5b at 11:30am CET. Recent weak 5Y auction highlighted by analysts, notion that foreign demand is weakening misplaced; issue seen as cheap in ASW and in RV.
  • Santander (Adam Dent)
    • Low attendance in last sale may boost fears of uncovered auction; suggestions that foreign investors are shunning gilts premature, may find relief rally after this sale
    • Front-end gilts have outperformed on the curve, haven demand may persist even if yields overall begin to rise
    • In RV, 5Y gilt looks cheap, particularly vs old high coupon bonds; recommend using auction to extend from 2020 issues into 2021
  • Barclays (Khrishnamoorthy Sooben)
    • Prior auction of this gilt caused a stir with cover ratio of 1.07, 4.2bps tail; there is little evidence to support recent discussion of weakening demand at auctions; selling of gilts in Jan. by overseas investors is a typical phenomenon
    • Auction should benefit from RV cheapening of the issue in ASW, a solid result will temper concerns over a structural weakening in demand
  • BNP (Parisha Saimbi)
    • 0.70% yield level is lowest ever; 2015 saw stellar inflows into U.K. gilts by overseas investors, though have suffered large outflows in Dec., Jan.
    • 5Y has outperformed on the curve, will be difficult for curve to steepen unless rate cuts are priced in, longer- term rates selloff
    • In RV, bond looks ~5bps cheap vs z-spread curve, offers opportunity to switch out of the older, rich 5Y gilts, and into this benchmark
  • RBC (Peter Schaffrik)
    • This issue almost certain to be increased further; as a result remains cheap on curve; sits a good few bps cheaper than peers on ASW and is unlikely to change
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Adam Dent (Abbey Natl Treasury Services)
Khrishnamoorthy Sooben (Barclays PLC)
Parisha Saimbi (BNP Paribas SA)
Peter Schaffrik (RBC Europe Ltd)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: 5Y Germany Trades Below Depo Rate, Rich in ASW

AUCTION PREVIEW: 5Y Germany Trades Below Depo Rate, Rich in ASW

(Bloomberg) -- Germany to sell 0% 04/2021 Bobl for EUR4b at 11:30am CET; analysts highlight the bond trades well below current depo rate, expensive on ASW, though cheap to fitted curve.
  • UBS (Nishay Patel)
    • 5Y Germany trades at record low levels, below ECB depo rate; on the curve looks rich relative to 3s, 7s
    • Cross-market, bobl is at expensive end of range vs other core, also historically rich on ASW
  • Mizuho (Antoine Bouvet)
    • Bond initially met with lukewarm reception, currently sits as cheapest issue on fitted curve; trades close to flat on the roll, which is slightly rich vs prior issues
  • Commerzbank (Benjamin Schroeder)
    • German 5Y yields have dropped to record lows, close to -0.4%, as ECB easing expectations have risen; bobl now outside scope QE purchases, at least until next week
    • In ASW, 5Y is at expensive end of range, close to -40bps vs -33.5bps at launch
  • ING (Martin van Vliet)
    • Despite yday’s 2bps uptick, 5Y still trades nearly 10bps through current ECB depo facility rate; markets priced for negative policy rate to persist for years
    • 5Y bobl trades at 2bps concession to the German curve, which should help get the auction done
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Nishay Patel (UBS Global Asset Management Japan Ltd)
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Martin Van Vliet (ING Groep NV)

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UUID: 7947283