Halister News

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News; Bloomberg will be live blogging after the employment report, please follow the TOPLive blog here.

• Factory Orders -0.2% m/m; range -0.5% to 0.2% (48 estimates)
• Durables -0.6% m/m; range -1% to -0.2% (6 estimates)
• Durables Ex-Trans -0.2% m/m; range -0.2% to 0.1% (3 estimates)
• Cap Gds Nondef Ex Air 0.1% m/m; range 0% to 0.3% (3 estimates)
• • Factory orders last declined in November
• Ism Non-Manu 57.1; range 54.9 to 60.1 (70 estimates)
• • Index will probably "remain relatively lofty"; regional service data "performed well on the month and suggest still-brisk activity": RBC Capital Markets
  • The year-to-date monthly average is 56.7
• LMCI 3% m/m; range 2% to 5% (5 estimates)

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News; Bloomberg will be live blogging after the employment report, please follow the TOPLive blog here.

• Productivity -0.1% q/q; range -0.7% to 0.2% (48 estimates)
• Unit Labor Costs 2.4% q/q; range 2.2% to 3% (47 estimates)
• • In its preliminary report, the government said first-quarter productivity declined 0.6 percent, the most in a year; compares with an average annual increase of 0.6 percent from 2012 through last year

(Bloomberg) -- Failure of U.S. rate volatility to rebound during Friday’s UST rally goes against established patterns and is “a sign of complacency in the market,” Morgan Stanley strategists Matthew Hornbach and Sam Elprince say in June 2 note.

• 1y10y vol is at lowest level in a decade, driven by pricing out of uncertainty around Fed balance sheet after May FOMC minutes, and “presents attractive points to own on the surface”
• “This vol selling is driven by a search for yield as it seems to be one of the few remaining trades left to clip carry in a world of low rates and flat curves”
• MS recommends “a long vol trade to take advantage of these current levels” -- buy 1y2y and midcurve 1y2y2y ATMF receivers vs sell 1y4y ATMF receiver for 3c upfront premium; risk to trade is “a large selloff or rally in front-end rates”
• MS also pulls May 3 recommendation of 3s20s steepeners; “The trade worked well as a way to capture carry and roll-down in a low-volatility environment, but we think that environment may be coming to an end”
• EDZ7/EDZ9 flattener recommendation is maintained ahead of Comey’s June 8 congressional testimony, into which “we do not see an easy path ahead for higher Treasury yields”

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang, Elizabeth Stanton

(Bloomberg) -- Loxo Oncology rises as much as 33% pre-market on 6.6k volume after data presented at the American Society of Clinical Oncology (ASCO) meeting showed that 76% of patients with tumors harboring tropomyosin receptor kinase (TRK) fusions responded to treatment with larotrectinib. Citi analyst Yigal Nochomovitz reinstated a buy rating from neutral and raised PT to $86 from $45.

• ASCO data have outperformed Citi’s expectations; larotrectinib has "unequivocally delivered on the promise of precision medicine in oncology" and on LOXO’s founding thesis
• Says duration is very impressive with median progression-free survival not reached; increases assumed duration to 20 months from 16
• Sees FDA approval for larotrectinib as close to a "slam dunk" as it gets in biotech
• LOXO has 6 buys, no holds, no sells, avg PT $68
• NOTE: Watch Ignyta; shares may move on larotrectinib data as RXDX’s entrectinib, another TRK inhibitor, is in clinical testing; RXDX planning to file NDA in 1H18
• NOTE: May 12, Loxo Oncology Confirms Larotrectinib Orphan Status

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net Steven Fromm

(Bloomberg) -- Bank revises projection for IPCA inflation index in 2017 to 3.8% from 4.2%, and for 2018 to 4.8% from 5.0%, according to report signed by analysts led by Nilson Teixeira.

• 2017 inflation revision “results mainly from the more favorable inflation dynamics in the short term than previously expected, especially for administered prices”, says the report citing gasoline prices as an example
• 2018 forecast change due “mainly to the revision of the dynamics of inflation for the next few months”
  • Credit Suisse projects IPCA in May at 3.8% y/y and at 2.9% y/y in August, “the lowest figure for the year”
    • “Although we project a rise in inflation in the last months of the year, we now expect such increase to be less significant than previously anticipated”
  • Rise in inflation next year will be prompted mainly by a scenario of sharp BRL depreciation and higher food inflation, with dissipation of the favorable supply shock of this year
  • Wide output gap will contribute to reduce inflation in the items most sensitive to domestic demand, although at a lesser magnitude than in 2016 and 2017
• In a separate report, Credit Suisse’s analysts rise forecasts for Brazil’s exports to $202b in 2017 from $185b in 2016, and for imports to $150b in 2017 from $138b in 2016, resulting in a trade surplus of $52b this year, higher than the last forecast of $45b
• Analysts see a “slight rise in the current-account deficit, from 1.3% of GDP in 2016 to 1.4% of GDP in 2017”, saying the “outlook for external accounts remains benign for 2017”
  • “The rise in the deficit of services and income in the first four months of the year was in line with our projections”
  • “The increase was explained mainly by the improvement in domestic demand and by the lag effect of the BRL appreciation in real terms”

To contact the reporter on this story: Leonardo Lara in Sao Paulo at llara1@bloomberg.net To contact the editors responsible for this story: Daniela Milanese at dmilanese@bloomberg.net Danielle Chaves