HALISTER1: AUCTION PREVIEW: New 10Y OAT Seen as Chance to Add Risk Pre-Vote

AUCTION PREVIEW: New 10Y OAT Seen as Chance to Add Risk Pre-Vote

(Bloomberg) -- France to sell a new 1% 05/2027 and tap 1.5% 05/2031 for EU7b-8b, equivalent to around EU8.7m/bp in risk terms.
  • BNP (Eric Oynoyan)
    • Positive factor for 10-year OATs is that redemptions and coupon payments are the second largest of the year this month at EUR42.5b; 10-year OATs have outperformed Bunds the first two weeks of April in eight of the nine years since 2007
    • OAT/Bund spread trading range has shifted higher moving from 25/45bp to 40/75bp, which was the range seen before initial speculation over ECB quantitative easing
      • This auction could be seen as an opportunity for investors to add OAT exposure before the expected 10y OAT/Bund spread compression to the low-40s after the French elections, or to reduce OLO exposure in favor of OATs
    • More conservative investors could use the extreme steepness of the 2s10s OAT curve vs bunds to put on structural 2s10s OAT flatteners ahead of the likely more hawkish ECB in Q2
  • Mizuho (Peter Chatwell)
    • New 10-year looks cheap on the roll by over 1bp; attractive to buy vs the OAT future or the CTD as tail risk trade
    • Longer term investors who can look through the political event risk prefer like switching out of Belgium into France
  • ING (Benjamin Schroeder)
    • New 10-year bond traded at a roll of 7bp vs benchmark in the gray market, slightly less than the current roll; equates to 72.2bps vs Germany
    • OAT/Bund currently trades in the middle of the range seen since late January, similar seen in OAT/OLO after the recent cheapening
      • See more value for 10-year OATs in a box versus 30- year OAT/OLO, especially if a 30-year OAT syndication materializes

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Benjamin Schroeder (ING Groep NV)
Eric Oynoyan (BNP Paribas SA)
Peter Chatwell (Mizuho Financial Group Inc)

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UUID: 7947283

HALISTER: EU Imposes Five-Year Tariffs on Chinese Hot-Rolled Coil Steel

EU Imposes Five-Year Tariffs on Chinese Hot-Rolled Coil Steel

(Bloomberg) -- The European Union imposes five-year tariffs against China on a kind of steel known as hot-rolled coil in bid to ease competition for EU producers including ArcelorMittal and Thyssenkrupp.
  • The duties as high as 35.9% punish Chinese exporters such as Wuhan Iron & Steel and Angang Steel for allegedly selling hot-rolled coil in the EU below-cost, a practice known as dumping
  • The European Commission, the 28-nation EU’s trade authority in Brussels, announces the levies in bloc’s Official Journal
  • In a separate EU dumping case involving hot-rolled coil from Russia, Ukraine, Serbia, Iran and Brazil, the commission decides against any provisional anti-dumping duties as it continues its investigation
  • NOTE: The five-year “definitive” measures against China, due to take effect on Friday, follow provisional EU anti- dumping duties as high as 22.6% introduced in October on Chinese hot-rolled coil and mark the end of a dumping inquiry begun in February 2016
  • NOTE: Oct. 7, 2016: China Faces More EU Tariffs on Steel Amid Overcapacity Worry Link

Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
000898 CH (Angang Steel Co Ltd)
MT NA (ArcelorMittal)
600005 CH (Wuhan Iron & Steel Co Ltd)
TKA GR (thyssenkrupp AG)
0629846D BB (European Commission)

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UUID: 7947283

HALISTER: Unilever to Exit Spreads, Buy Back EU5B Shares, Raise Dividend

Unilever to Exit Spreads, Buy Back EU5B Shares, Raise Dividend

(Bloomberg) -- Co. aims for 20% underlying margin before restructuring by 2020, Unilever says in statement.
  • To exit spreads and review dual-headed legal structure
  • Aims for net debt/Ebitda ratio of 2 times
  • Unilever to raise dividend 12%
  • Co. maintains FY outlook of underlying sales growth of 3%-5%
  • NOTE: Unilever Review Could Be Opportunity for Shake-Up: Street Wrap

Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
UNA NA (Unilever NV)

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UUID: 7947283