HALISTER1: CARDS II Trust, Series 2017-1 - DBRS Rating Report

CARDS II Trust, Series 2017-1 - DBRS Rating Report

Alert: HALISTER1
Source: DBR (Dominion Bond Rating Service)

People
Fanfei Gong (DBRS Ltd)
Geetika Gupta (DBRS Ltd)
Jamie Feehely (DBRS Ltd)

Topics
Credit Analysis Research
Credit Research
Fixed Income Research
Investment Research
Reports

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UUID: 7947283

HALISTER1: Fed June/Sept Meetings Are Key to Balance Sheet: Morgan Stanley

Fed June/Sept Meetings Are Key to Balance Sheet: Morgan Stanley

(Bloomberg) -- FOMC’s June, September meetings “will be key risk events in the timeline toward the commencement of balance sheet normalization,” Morgan Stanley analyst Adam Richmond and strategist Matthew Hornbach wrote in May 10 note.
  • Fed will likely communicate details on ceasing or phasing out reinvestments “well in advance” of any actual change
  • If Fed hikes in June and September meetings and/or clarifies its intentions on reinvestment policy, “markets will react accordingly”
    • MBS spreads will drift wider, UST yields may rise toward higher end of YTD range if investors pull forward their expectations on timing of balance-sheet normalization
    • At same time, credit may be slower to react over next few months; better liquidity in UST and agency MBS could make these asset classes move first
    • Later in 2H, credit should weaken vs USTs and agency MBS as investors consider implications of shrinking balance sheet

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Adam Richmond (Morgan Stanley & Co LLC)
Matthew Hornbach (Morgan Stanley & Co LLC)

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UUID: 7947283

HALISTER1: USD Set to Climb, Weakness ‘Overdone’: Columbia Threadneedle

USD Set to Climb, Weakness ‘Overdone’: Columbia Threadneedle

(Bloomberg) -- DXY Index has room to rise to 102 in the next three to six months, in part because the market is overly optimistic about Europe’s economy, Ed Al-Hussainy, senior interest-rate and currency analyst at Columbia Threadneedle, says in interview.
  • DXY currently at about 99.7
  • Maintains long call on GBP from end of last year because “a lot of negativity has been priced in”
    • Expects sterling to recover to 1.35 in next three to six months; break of 1.30 could prompt a short squeeze
    • “There’s a massive speculative short in the pound that’s still in place, and I think that speculative short is getting squeezed.”
  • UST 10Y yield seen climbing toward 2.6% on expectations of Fed rate increase in June and guidance around balance sheet
  • “We still like being short bunds,” given negative backdrop, he says. “The growth picture has improved sufficiently enough that the ECB will start thinking about pulling back on QE.”

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ed Al-Hussainy (Columbia Management Investment Advisers LLC)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: Producer Prices, Jobless Claims Due at 8:30

U.S. ECO PREVIEW: Producer Prices, Jobless Claims Due at 8:30

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News:
  • Initial Claims 245k; range 235k to 255k (46 estimates)
  • Cont. Claims 1980k; range 1970k to 2010k (5 estimates)
    • "In the coming weeks, larger and possibly prolonged layoffs, stemming from shutdowns in the auto industry due to sales weakness and model retooling, may send claims higher": Bloomberg Intelligence
    • The prior report showed jobless claims dropped by 19,000 in the week ended April to a three-week low of 238,000
  • PPI 0.2% m/m; range -0.1% to 0.4% (58 estimates)
  • Core PPI 0.2% m/m; range -0.1% to 0.3% (48 estimates)
  • Ex trade PPI 0.2% m/m; range 0.1% to 0.2% (8 estimates)
  • PPI 2.2% y/y; range 2% to 2.4% (23 estimates)
  • Core PPI 1.6% y/y; range 1.5% to 1.8% (22 estimates)
    • Inflation is "trending higher" as energy prices rise from low levels: Bloomberg Intelligence
    • In March, the PPI rose 2.3 percent from a year earlier, the most in five years
    • On a month-over-month basis, though, it fell 0.1 percent, the first decline since August, evidence prices will accelerate only gradually

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283