Halister News

(Bloomberg) -- University of Michigan final consumer sentiment index for Feb. seen at 91 vs preliminary 90.7 (forecast range 89.8 to 93); based on random sample of households

• Jan. index was 92.0

--JOSHUA FINEMAN

(Bloomberg) -- EFG’s CEO Joachim Straehle says bank is hedged against risks associated to Malaysian money laundering case, according to interview with FuW.

• Doesn’t exclude possibility of asset outflow of 5% to 10% during integration
• NOTE: EFG to create top five Swiss private bank after BSI deal

(Bloomberg) -- UST yields, while historically low, “continue to look high” in a global context, and intermediate yields “still have a lot of room to fall” if U.S. is on verge of a slowdown, Barclays strategists led by Rajiv Setia say in Feb. 25 note.

• “Pessimism reflected in financial markets globally also seems to be filtering through into the US outlook”
• Large selloff seems unlikely unless “long-list of risks” (higher energy prices, reduced China concerns, high yield, and negative perceptions on banks) dissipate
• Correlation across asset classes is high and “given our cautiousness around risky assets, we remain neutral on outright duration”
• Buy 1x2 6m*10y payer spreads as they offer an “attractive risk reward profile”

(Bloomberg) -- Investors should move to neutral from previous overweight on MBS basis due to “increasing downside risks,” write BNP Paribas MBS strategists Sarah Hu and Philip Patterson in a research note.

• Basis “volatile in the short-term and likely to widen in the long-term”
• Ongoing theme of the year so far is increased supply
  • Rally in mortgage rates YTD has led MBS refi index to rise to ~2300 from 1100 YTD
  • 3.60% 30Y mortgage rate has 62% of the market refinanceable
• BNP economists have reduced forecast for Fed rate hikes through 2017 year-end to zero from seven
  • 10Y yield forecast to end year ~1.50%
• Increased concerns over U.S. growth could lead to further risk-off flows and mortgages could underperform
• Valuations appear “fair to rich”
• Basis widening may continue until investors price in eventual Fed tapering of MBS reinvestments

(Bloomberg) -- Honeywell says offer was for UTX holders to receive $42.63/shr in cash plus 0.614 shr.

• HON seeking to re-engage with UTX to seek agreement

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