HALISTER1: UST MORNING CALL: ‘Entering a Pivotal Point’ in UST Seasonals

UST MORNING CALL: ‘Entering a Pivotal Point’ in UST Seasonals

(Bloomberg) -- “We are currently entering a pivotal point” in UST seasonals where historically 10Y sector sells off between the Feb. and May refundings, CRT strategist David Ader says in note.
  • However, “seasonals are not the only influence at work in these markets and with the impact of stocks and oil still strong,” they “are more of an underlying factor, similar to issuance, that will come into play in calmer markets”
  • Other observations from strategist morning notes:
  • BMO (Aaron Kohli): “Early consensus around why rates are selling off this morning has to do with the building of expectations that bad data may be paving the way for more central bank stimulus”
    • Although, an overnight intraday graph suggests “crude is leading the rates and equity markets to higher levels,” and “it may be a melt-up or a short-squeeze that’s driving price action, rather than a view towards further stimulus”
  • Marty Mitchell (independent): “Continue to watch the 2yr yield as well since a closing yield above the 0.81% level will suggest higher front-end yields and a narrowing of the yield curve”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Marty Mitchell (The Mitchell Market Report LLC)

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UUID: 7947283

HALISTER1: EUROPE RISK TIMELINE: ECB Policy Choices, Refugee Crisis Talks

EUROPE RISK TIMELINE: ECB Policy Choices, Refugee Crisis Talks

(Bloomberg) -- ECB’s meeting this month will be closely watched as slowing inflation argues for more easing, especially after steps taken in December fell short of expectations.
  • Regional summits on the refugee crisis will also be eyed for signs of stress in the EU; elections in three German states could reflect growing discontent with Merkel’s stance
  • Greece’s talks with creditors also be key as IMF warns the country may struggle to pay debt due next month
  • MAIN RISKS:
  • Money markets are pricing in more ECB easing at the March 10 meeting; comments from GC members suggest rate-setters are looking at a number of options to loosen policy: analysts
  • Germany’s Merkel has said Greece needs Europe’s help to keep the refugee crisis from escalating into “chaos”
    • The crisis could lead to some flexibility for Greece in the first bailout review, although Greeks and Europeans will still have to move closer to the IMF’s position on the fiscal gap, Eurasia Group analyst Mujtaba Rahman writes
  • Spain’s Socialist party leader faces confidence votes in parliament on March 2 and 4, after signing a pact with the pro-market Ciudadanos to form a government
  • Also high on the agenda: banking sector stress tests, the impact of ECB easing on bank profitability and debates over zero-risk weighting for sovereign bonds
MARCH
  • The Italian state guarantee on banks’ bad debt may start by month-end
  • 2: Spain’s Socialists face confidence vote in parliament
  • 3: U.K. services, composite PMIs
  • 7: Eurogroup meets: Dijsselbloem said on Dec. 8 he wants report on EU banking plan ready by this day
    • To discuss progress of Greece bailout program
  • Extraordinary EU-Turkey summit on migration
    • If Turkey doesn’t co-operate, European countries will probably re-impose and/or tighten internal border controls on the migrant route, Berenberg’s Holger Schmieding says
  • 4: Fitch may review Portugal’s rating
  • 10: Irish parliament first meeting after inconclusive election result
  • 10: ECB rate decision; Draghi said at January meeting bank may review its measures at the March meeting, spurring analysts to bring forward expectations for more easing
  • 11: Fitch may review Finland, Greece ratings
  • 13: State elections in three German states: Sachsen-Anhalt, Baden-Wurttemberg, and the Pfalz; the votes may be seen as a referendum on Merkel’s handling of the refugee crisis, BNP Paribas says
  • 16: Greece needs to repay ~EU573m to the IMF, potentially exhausting its cash reserves if bailout tranche isn’t disbursed by then
  • 16: U.K. budget expected to include further cuts as lower bond yields boost coffers but deficit reduction looks set to miss target; OBR publishes new forecasts
  • 16: U.K. Feb. claimant count; average weekly earnings
  • 17/18: EU summit
  • 17: BOE rate decision
  • 17: Euro-zone Feb. CPI
  • 17: SNB rate decision
  • 17: Basel Committee’s consultation on step-in risk closes; may lead to some banks needing more capital, Fitch says
  • 18: S&P may review Finland, Portugal ratings
  • 22: U.K. Feb CPI
  • 23: U.K. FPC meets, record will be published April 5; HSBC expects an increase in the countercyclical buffer
  • 24: Eurozone preliminary March services, composite PMI
  • 30: German March CPI
  • 31: U.K. Final 4Q GDP reading
APRIL
  • The earliest fresh Portuguese elections can be called
  • Introduction of the Living Wage in the U.K.; may support wage and price growth, CEBR says
  • 1: Fitch may review Germany’s rating; S&P may review Spain
  • 5: U.K. services, composite PMI
  • 7: ECB accounts
  • 12: U.K. Jan. CPI
  • 14: BOE rate decision
  • 20: U.K. Jan. claimant count; average weekly earnings
  • 21: ECB rate decision
  • 21: Riksbank rate decision
  • 22: Eurozone preliminary April services, composite PMI
  • 22: Fitch may review Italy rating; S&P may review France
  • 27: U.K. preliminary 1Q GDP
  • 28: German April CPI
  • 29: S&P may review U.K. rating; DBRS is scheduled to report on Portugal’s rating; any downgrade would make PGBs ineligible for ECB QE
  • May
  • 3: Spain’s parliament will be dissolved if no govt has been formed
  • 5: U.K. services, composite PMI
  • 6: Moody’s may review Portugal rating
  • 12: BOE rate decision; quarterly Inflation Report
  • 13: S&P may review Italy’s rating, Moody’s may review Ireland
  • 18: U.K. Jan. claimant count; average weekly earnings
  • 19: ECB accounts
  • 24: EU May prelim. services, composite PMI
  • 30: German May CPI
  • 27: Moody’s may review U.K.’s credit rating
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Angela Merkel (Federal Republic of Germany)
Holger Schmieding (Joh Berenberg Gossler & Co KG)
Mujtaba Rahman (Eurasia Group)

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HALISTER1: BNP Paribas Sees More Pressure on Hryvnia After 12% Drop This Yr

BNP Paribas Sees More Pressure on Hryvnia After 12% Drop This Yr

(Bloomberg) -- Pressure on hryvnia “may resume soon, given no clarity regarding the IMF financing, as well as the destiny of the incumbent government,” Serhiy Yahnych, analyst at UkrSibbank, BNP Paribas’s Ukrainian unit, says in note.
  • Ukraine Central Bank currency sales last wk “were apparently made on a pre-emptive basis, as signs of potential bid/ask imbalances could be detected by the regulator”
  • Sees market volatility dropping later in 2016 on seasonal rise of exports, seasonally reduced gas imports
  • NOTE: Hryvnia -11.5% vs dollar in 2016, worst performing currency in emerging Europe and Africa
  • NOTE: Ukraine Bonds Gain Second Day as Hryvnia Drops From Week-High
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Serhiy Yahnych (Ukrsibbank JSC)

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UUID: 7947283

HALISTER: Honeywell’s Cote Brings Out Elephant Gun as Investors Get Uneasy

Honeywell’s Cote Brings Out Elephant Gun as Investors Get Uneasy

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
HON US (Honeywell International Inc)

People
David Cote (Honeywell International Inc)
Deane Dray (RBC Capital Markets LLC)
Gregory Hayes (United Technologies Corp)
John Welch (Jack Welch LLC)
Jonathan Wright (Nomura Holdings Inc)

Topics
CEO Interviews

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UUID: 7947283