HALISTER1: RESEARCH ROUNDUP: UST Belly Cheapening Expected to Continue

RESEARCH ROUNDUP: UST Belly Cheapening Expected to Continue

(Bloomberg) -- Front-end steepeners favored, positioning for 5Y sector to continue cheapening even after March 15 Fed rate increase has been almost fully priced in; mixed views further out the curve as monetary, fiscal policy remain uncertain in near-term.
  • BofA (strategists including Shyam Rajan)
    • Market-implied Fed outlook still favors short 3s, positioning for higher June Libor and receiving May FOMC OIS as hedge
    • Remain bearish rates, expecting 10Y to test 3% by mid- year
    • Express bearish 3Y call via selling 2s3s5s swap butterfly at -6bp level
    • Buy EDM7 98.625 puts for 4.5bp given attractive risk/rewards versus underlying price level and credit risk rising ahead of France election (Libor-OIS widener)
      • Tactically hedge by receiving May FOMC OIS (hike in March and May unlikely)
    • Remain short real rates (paying 10Y real swap) and long 30Y spreads
  • Morgan Stanley (strategists led by Matthew Hornbach)
    • Short 5Y ahead of March FOMC on potential dots change, MORE
  • TD Securities (strategists including Priya Misra)
    • 10Y should stay rangebound between 2.33% and 2.50% until there are signs of progress on tax reform; discussion of Fed portfolio runoff will pressure rates higher later in the year, offset by low global rates and lower terminal funds rate than in prior cycles
  • Barclays (strategists including Rajiv Setia)
    • Close out short April Fed Funds futures trade, initiated Feb. 24; maintains long 10Y and 3s10s flatteners; MORE
  • JP Morgan (Jay Barry, Bruce Sun and Phoebe White)
    • Turn duration bearish, initiate 2s5s steepener; MORE
  • Citi (Jabaz Mathai and Jason Williams)
    • 5s30s steepener recommendation at risk given expected higher front-end rates and potential for assessment of higher neutral rate should terminal rate in the cycle cheapen beyond 2.25%
    • Duration-neutral trades for potential equity market correction include long 5s or 10s versus wings, selling 5y5y breakevens and receiving 30Y swaps
    • Futures positioning suggests debt ceiling plays; MORE
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Shyam Rajan (Bank of America Corp)
Bruce Sun
Jabaz Mathai (Citigroup Inc)
Jason Williams (Citigroup Inc)
Jay Barry (JPMorgan Chase & Co)

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UUID: 7947283

HALISTER1: Deere & Company and Related Entities - Rating Report

Deere & Company and Related Entities - Rating Report

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

Tickers
DE US (Deere & Co)

People
Gregory Pau (DBRS Ltd)
Kam Hon (DBRS Ltd)

Topics
Credit Analysis Research
Credit Research
Fixed Income Research
Investment Research
Issuer Focused Research

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UUID: 7947283

HALISTER1: U.S. Structured Finance Newsletter - Rental Car Companies Seeing an Increase in Risk Vehicles

U.S. Structured Finance Newsletter - Rental Car Companies Seeing an Increase in Risk Vehicles

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

People
Charles Weilamann (DBRS Inc)
Chris Donofrio (Dbrs Inc)
Chris O'Connell (DBRS Inc)
Christopher D'Onofrio (DBRS Inc)
Claire Mezzanotte (DBRS Inc)

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

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UUID: 7947283

HALISTER1: Buy Peru Local Debt on Expected Policy Easing: Deutsche Bank

Buy Peru Local Debt on Expected Policy Easing: Deutsche Bank

(Bloomberg) -- The Soberanos 26s offer attractive yield pick-up and benefit from Peru’s steep yield curve and supportive stance on monetary policy, Deutsche Bank strategist Guilherme Marone writes in research note.
  • Recommends buying bonds without currency hedge
  • Soberanos offer highest 10-year term premium in Latin America
  • Soberanos 26s benefit from lighter positioning among foreigners compared to shorter and longer-term debt
  • Risks include the bonds’ exposure to currency, China, copper and commodity prices; NDF rates are above 5%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Guilherme Marone (Deutsche Bank AG)

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UUID: 7947283

HALISTER1: DBRS: TD Reports Strong Q1 2017 Results;

DBRS: TD Reports Strong Q1 2017 Results;

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

Tickers
TD CN (Toronto-Dominion Bank/The)

People
Michael Driscoll (DBRS Inc)

Topics
Credit Analysis Research
Credit Research
Earnings Review Research
Fixed Income Research
Investment Research

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UUID: 7947283