Halister News

(Bloomberg) -- Brazil is unlikely to meet fiscal target as government has overestimated revenues in its budget, Mansueto Almeida, a consultant specializing in fiscal accounts, says in a phone interview.

• “As revenues are frustrated, a BRL 140b cut would be needed, but that is unlikely”
  • Govt should review all its spendings, including social programs; to close the fiscal gap with taxes, increase is not feasible as it would harm further the growth, Almeida says
• Luiz Eduardo Portella, treasurer at Modal Asset Management, says if country runs a second consecutive budget deficit, it will be difficult for BRL to remain below 4.00/USD
  • In short term, BRL’s relatively positive performance is due to environment of near zero rates of main central banks, which has led some investors to search for high- yield countries such as Brazil

(Bloomberg) -- 5Y duration short recommended on Feb. 5 hit stop as rally drove 5Y yield 14bp below entry level, JPMorgan strategists led by Jay Barry say in Feb. 11 note.

• Recommendation was based on “technical factors including investor positioning, February seasonals and the multi-year low levels of carry”
• However, “risk-off move has been the predominant force in Treasury markets over the past few days” with intermediate yields yday declining to lowest levels since mid-2013

(Bloomberg) -- CBRT has seemingly postponed proposed monetary-policy simplification given market volatility; now expect first hike in one-week repo rate and lower band of rate corridor to come in June, Guillaume Tresca, senior EM strategist at Credit Agricole, writes in client note.

• However, CBRT is already tightening monetary policy “by the back door”; it will continue to have an active liquidity management policy, pushing up the effective cost of funding for banks to cap inflation and stabilize the TRY
• Governor Basci’s term ends mid-April, while 4 new MPC members will be appointed before end-June; a question mark remains over the process to narrow the rate corridor
• “CBRT’s confusing policy is eroding its credibility further; this will be detrimental to Turkish assets”
• Expects TRY to depreciate further but given the punitive carry, the view is best expressed through rates
  • Recommends 1Y-5Y CCS flattener at -40bps, target 61bps; stop loss -29bps
• NOTE: See related story: Turkey central bank simplification seen after Basci term ends: JPMorgan

(Bloomberg) -- Desk allows professionals including employees, consultants and legal specialists to report serious breaches of laws and regulations, De Nederlandsche Bank says.

• Names fraud, corruption, terrorist finance, money laundering, conflicts of interest as examples
• Complaints desk can be reached under Dutch phone number 0800 020 1068, via meldpuntmisstanden@dnb.nl, or online

(Bloomberg) -- Deutsche Bank to buy back debt, says tender offer to be open for 7 business days for EUR denominated securities, 20 days for USD denominated.

• Bank says “strong liquidity position allows it to repurchase securities without any corresponding change to 2016 funding plan”
• Shares extend gains, up 9.4%
• Statement

--JURJEN VAN DE POL