HALISTER1: Fed to ‘Inch Closer’ to a June Hike Next Week: Morgan Stanley

Fed to ‘Inch Closer’ to a June Hike Next Week: Morgan Stanley

(Bloomberg) -- Fed is likely to keep fed funds rate at 0.75%-1% at its next meeting, with very little change needed to statement, Morgan Stanley economists led by Ellen Zentner and strategist Matthew Hornbach wrote on Thursday.
  • Fed remains on track to deliver three rate increases this year, with next move at June 13-14 meeting
    • With market pricing in a more than 60% chance of a June hike, Fed can avoid sending signals
  • FOMC will probably acknowledge that labor market is still improving, inflation is moving closer toward objectives, and business investment is rising
  • Investors are more likely to react to clues about Fed’s balance sheet discussions in weeks to come, when FOMC participants give speeches and interviews
  • MS continues to recommend holding EDZ7/EDZ9 flatteners, UST 3s30s steepeners

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Ellen Zentner (Morgan Stanley)
Matthew Hornbach (Morgan Stanley)

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UUID: 7947283

HALISTER1: Fed Statement to Keep Prospect Open for a June Hike: CapEcon

Fed Statement to Keep Prospect Open for a June Hike: CapEcon

(Bloomberg) -- Fed is almost certain to leave rates unchanged at May 2-3 meeting, move ahead with another hike in June, assuming employment growth rebounds, Capital Economics economist Michael Pearce wrote in note Wednesday.
  • Statement is unlikely to signal any major changes to policy, yet may acknowledge softer tone in business surveys
    • Surprise drop in core inflation for March may give policy makers “pause for thought”
  • Balance sheet will be another “live issue” at meeting
    • Doesn’t appear to be consensus on how large Fed’s portfolio should be long term; good chance Fed will want significantly larger balance sheet than in past
    • Wouldn’t be surprised to see some discussion of issue in minutes of May meeting

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Michael Pearce (Capital Economics Ltd)

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UUID: 7947283

HALISTER1: Toronto Hydro Corporation - DBRS Rating Report

Toronto Hydro Corporation - DBRS Rating Report

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

Tickers
3806Z CN (Toronto Hydro Corp)

People
Jay Gu (DBRS Ltd)
Tom Li (DBRS Inc)

Topics
Credit Analysis Research
Credit Research
Fixed Income Research
Industry & Sector Research
Investment Research

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: Durables, Claims, Adv. Trade Due in 5 Minutes

U.S. ECO PREVIEW: Durables, Claims, Adv. Trade Due in 5 Minutes

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News:
  • Adv Goods Trade Balance $-65.2b; range $-66.8b to $-55b (40 estimates)
    • Goods balance has declined two of the past three months
  • Wholesale Inv. 0.2% m/m; range 0% to 0.5% (11 estimates)
  • Durables 1.3% m/m; range -0.5% to 4.3% (79 estimates)
  • Durables Ex-Trans 0.4% m/m; range 0% to 1.2% (56 estimates)
  • Cap Gds Nondef Ex Air 0.5% m/m; range -0.5% to 1% (24 estimates)
  • Cap Gds Ship Nondef Ex Air 0.1% m/m; range -0.2% to 0.2% (6 estimates)
    • Cap goods new orders ex-aircraft were negative for first time in five months in Feb.
    • "Aircraft-led increase expected in March." -- Wrightson
    • An increase should be expected, as four of the five new order components of the regional Fed surveys registered gains last month. -- Bloomberg Intelligence
  • Initial Claims 245k; range 235k to 256k (47 estimates)
  • Cont. Claims 2007k; range 1985k to 2040k (6 estimates)
    • Continuing claims currently at lowest level since April 2000
    • Claims remain historically low. Employers appear to be opting to retain workers rather than furlough them amid the 1Q growth soft patch. -- Bloomberg Intelligence

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283