HALISTER1: Investors Underweight High Yield 1st Time Since 2008: BofAML

Investors Underweight High Yield 1st Time Since 2008: BofAML

(Bloomberg) -- High yield investors have turned bearish, with 85% finding spreads overvalued compared to 67% in January, causing them to shift to a net underweight position for the first time since 2008, BofAML Credit Investor Survey shows.
  • Investors with overweight positioning in high yield fell to 12% from 24% in January, the lowest reading since December 2008
  • Bearish sentiment took hold amid plunging oil prices, imminent Fed rate hike and significant outflows from retail funds, led by high yield ETFs
  • While high yield issuance set a new record last week with volume of $17.5b, retail funds reported the biggest outflow since November, causing anxiety over valuations
  • However, as yields have backed up from multi-year lows, BofAML expects investors to take advantage of the benign default rate and improving fundamentals as reflected in U.S. economic data and add risk to their portfolios in the next couple of months
    • Investors would reach for yield and begin an indiscriminate beta compression

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: Itau’s Cherman: Brazil GDP to Grow 1% 2017, 4% in 2018

Itau’s Cherman: Brazil GDP to Grow 1% 2017, 4% in 2018

(Bloomberg) -- (Translated by Google and reviewed by editors.)
  • Brazil’s economy can grow rapidly; the issue is when it will start to grow, said Itau Unibanco chief economist Luiz Gustavo Cherman at an event in Sao Paulo.
  • I expect small GDP growth already in 1Q17
  • Uunemployment will peak in Feb. 2018
  • Interest rate should close 2017 at 8.25%
  • Itau sees inflation at 4.1% in 2017, 3.8% in 2018
  • Itau sees the dollar at 3.35 reais at the end of 2017, 3.45 reais at the end of 2018

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ITUB4 BZ (Itau Unibanco Holding SA)

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: Producer Prices Due in 5 Minutes

U.S. ECO PREVIEW: Producer Prices Due in 5 Minutes

(Bloomberg) -- Following are forecasts for today’s U.S. economic releases as compiled by Bloomberg News:
  • PPI 0.1% m/m; range -0.3% to 0.2% (65 estimates)
  • Core PPI 0.2% m/m; range 0% to 0.3% (56 estimates)
  • Ex trade PPI 0.2% m/m; range 0.1% to 0.2% (9 estimates)
  • PPI 1.9% y/y; range 1.5% to 2.2% (24 estimates)
  • Core PPI 1.5% y/y; range 0.8% to 1.5% (23 estimates)
    • "Headline and core inflation on the wholesale level have not yet flashed any notable warning signals, having been below 2.0% for more than two and a half years": Bloomberg Intelligence
    • PPI last declined in October, falling 0.1 percent

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283