HALISTER1: Concorde Securities Sees First Hungary Rate Increase in 2018

Concorde Securities Sees First Hungary Rate Increase in 2018

(Bloomberg) -- Central bank may start tightening in 2018 at the earliest, analyst Janos Samu tells reporters in Budapest.
  • 3-month BUBOR unlikely to drop below 0.2%
  • Forint forecast to stabilize at close to 300/EUR in 2017
  • Expects avg CPI at 2% this year, at 2.2% at year-end
  • Sees 3.5% GDP growth in 2017
  • NOTE: Hungary Digs In Against Tightening Bets by Boosting Liquidity
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Janos Samu (Concorde Securities RT)

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UUID: 7947283

HALISTER1: AUCTION PREVIEW: Steady Demand Seen at Last Tap of July ’26 Gilt

AUCTION PREVIEW: Steady Demand Seen at Last Tap of July ’26 Gilt

(Bloomberg) -- U.K. DMO plans to sell GBP2b in 1.5% 2026 gilts at final scheduled sale of series, equivalent to around GBP1.8m/bp in risk terms or 16k gilt futures.
  • NatWest Markets (strategists including Simon Peck)
    • Expect the auction to go fine, given this is the final tap of this issue, before the DMO launches a new 10-year on March 14
    • The outright rally since Feb. 1 does not provide an appealing backdrop, though the issue does appear cheap by around 1bp on both the fitted and asset-swap curve
  • Citi (strategists including Saumesh Dutta)
    • See cheap valuation, upcoming coupon payments supporting demand at auction
    • See value going long 10-year vs 30-year swap spreads; divergence in 10-year gilts vs Treasuries may have further room to run
    • Targets 1% for 10-year gilts as rate hikes “distant” with inflation heading higher to 1.8% y/y, wages disappointing at 2.6%
  • RBC (Vatsala Datta)
    • Sees good demand on the back of micro RV interest, as well as with some support likely from upcoming coupon payments/ index extensions
    • Auction bond attractive on “micro relative value” with 25s-26s-27s gilt butterfly toward the cheaper end of the recent range
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Simon Peck (Royal Bank of Scotland Group PLC)
Saumesh Dutta (Citigroup Inc)
Vatsala Datta (RBC Europe Ltd)

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UUID: 7947283