HALISTER1: Singapore, Republic of - DBRS Rating Report

Singapore, Republic of - DBRS Rating Report

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

Tickers
1545Z SP (Republic of Singapore)

People
Fergus McCormick (DBRS Inc)
Jason Graffam (DBRS Inc)

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

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UUID: 7947283

HALISTER1: Uncertainty Going to Keep UST Yields From Rising, Korapaty Says

Uncertainty Going to Keep UST Yields From Rising, Korapaty Says

(Bloomberg) -- U.S. Treasury yields are “going to be in this range, grind a little” amid the uncertainty surrounding President Trump’s fiscal policies, Credit Suisse strategist Praveen Korapaty said during Bloomberg TV interview.
  • “The longer time lines get extended, the harder it’s going to be for yields to rise”
    • Korapaty had thought some of the policy, like tax reform, was going to be seen in 2Q
  • Also, not expecting “that much of a change” in the FOMC statement Wednesday, as the Fed wants to “preserve the optionality of signaling a hike”
    • Said Fed’s not ready to raise rates because there’s “really no inflationary pressure yet,” so no urgency for it to move fast; also cited uncertainty as another reason Fed isn’t ready to move again
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Praveen Korapaty (Credit Suisse Group AG)

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UUID: 7947283

HALISTER1: PREVIEW U.S. JAN. AUTO SALES: Incentives to Moderate, Richer Mix

PREVIEW U.S. JAN. AUTO SALES: Incentives to Moderate, Richer Mix

(Bloomberg) -- U.S. Jan. light vehicle SAAR est. 17.3m vs 17.9m y/y. Most automakers report monthly tomorrow pre-mkt.
  • See Bloomberg estimate chart
  • GM supply chain; Ford supply chain; FCAU supply chain
  • Bloomberg Intelligence primers for GM, Ford, Fiat Chrysler
    • BI credit primers for GM, Ford, Fiat Chrysler
  • 4Q results Ford, Fiat Chrysler; GM reports on Feb. 7
ANALYST COMMENTARY
  • JPMorgan (Ryan Brinkman): Channel checks suggest retail/fleet mix was “slightly softer” vs last year; rate of increase in retail incentives expected to moderate to high-single digit y/y percentage growth vs 22.6% y/y in Dec.; sees higher average transaction prices y/y, stemming from richer mix of crossover utility vehicles, sport utility vehicles, pickup trucks
  • RBC (Joseph Spak): Heavy promotions at end of year likely had a pull forward effect on January demand; post election, economy still ranks as biggest concern among dealers, according to RBC survey
  • LMC Automotive: Challenges for industry are maintaining profitability while coping with high inventories, elevated incentives, a joint report by J.D. Power and LMC says
  • ALG/TrueCar: While “exceptionally strong sales” at end of 2016 led to a slow start in January, additional incentives toward the end of the month “helped pick up the slack”
  • Buckingham (Glenn Chin): Sees GM underperforming industry sales, after significantly outpacing the market last month, while Ford outperforms industry; sees industry full-size pickup sales to posting “modest growth” of ~1% y/y
ESTIMATES
  • Big 3 ests.:
    • GM: -2.4%
    • Ford: -2.8%
    • Fiat Chrysler: -14%
  • Other ests.:
    • Toyota: -2%
    • Honda: 4%
    • Nissan: -1.3%
    • Hyundai/Kia: -2.1%
    • Volkswagen/Audi: 20%
RELATED:
  • Jan. 30, GM, Honda Set Up Joint Venture to Manufacture Fuel Cell Systems
  • Jan. 27, Ford CEO Told Trump U.S. Fuel-Economy Rules Risk 1 Million Jobs
  • Jan. 26, TrueCar Sees Total New Vehicle Sales Down 1.5% Y/y in January
  • Jan. 25, GM Is Top Pick at Morgan Stanley Citing Buybacks, Car-Truck Mix
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
005380 KS (Hyundai Motor Co)
F US (Ford Motor Co)
FCAU US (Fiat Chrysler Automobiles NV)
GM US (General Motors Co)
7267 JP (Honda Motor Co Ltd)

People
Glenn Chin (Buckingham Research Group)
Joseph Spak (RBC Capital Markets)
Ryan Brinkman (JPMorgan Chase & Co)

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UUID: 7947283

HALISTER1: RESEARCH ROUNDUP: Market Focused on Fed’s Balance Sheet Debate

RESEARCH ROUNDUP: Market Focused on Fed’s Balance Sheet Debate

(Bloomberg) -- (Updates BofAML and FTN and adds TD to item published Jan. 27.)
  • FOMC will likely keep rates unchanged Wednesday as policy makers await more detail on Trump administration’s policies, based on published research by economists and strategists; pre-FOMC meeting commentary focuses more on Fed’s portfolio.
  • Debate on Fed’s reinvestment policy will probably occur at 2-day meeting that starts today, yet won’t be mentioned in statement, say Standard Chartered economist Thomas Costerg and BofAML’s Michelle Meyer, Ian Gordon, others
    • While market will likely be looking at fifth paragraph on outlook for balance sheet, reinvestment policy, language should stay same, says JPMorgan economist Michael Feroli
  • See also Research Roundup: Fed could shrink balance sheet, cause UST volatility
  • Market-implied probabilities for next hike are below 50% through May meeting; fed fund futures fully pricing in a 25bp increase ~June; Jul17 implied rate 87.5bps, midpoint of 75bp-100bp target range
  • Barclays (Michael Gapen, Rob Martin, Blerina Uruci)
    • Fed will take definitive stand on labor market
    • Statement will reflect view that labor market is at or near full employment
    • Barclays still expects any balance-sheet reduction to occur through partial rollover of maturing securities; “outright assets sales are extremely unlikely”
    • MORE
  • Bloomberg Intelligence (Michael McDonough)
    • Fed to settle on same outcome as BOE and BOJ this week: no change in policy and updates to economic assessments
    • U.S. economy’s continued “encouraging” acceleration in y/y growth trend will be enough to keep Fed on gradual tightening path, yet probably at slower pace than projected in December
    • MORE
  • BofAML (Michelle Meyer, others)
    • Statement to be perceived as “bit more hawkish,” will likely mention reduced labor-market slack, may note improved confidence measures
    • Could result in further steepening of near-term path of monetary policy, increase market-implied probabilities for March hike; greater FOMC confidence could provide some reprieve to USD, as market focuses on balance of risks around Fed policy
    • Fed hasn’t pulled forward timing for ending reinvestments, despite recent mention of policy in its communications; likely to begin ending reinvestments when fed funds target range is 1.25%-1.5%
  • FTN (Christopher Low)
    • Expecting “no rate hike and no significant change in guidance”
    • FOMC also won’t be able to signal clear intent to hike in March, given committee’s commitment to using neutral rate as policy guide
    • Policy makers are already ~50bps above the last neutral rate, based on data rather than forecast; “doesn’t make sense to hike again until the gap shrinks a bit”
    • In separate note, strategist Jim Vogel said Fed may have to hold off on short-term rate hikes to study “interference caused by its need to cut the portfolio size”; investment/rate-hike “balancing act” will arrive in 2018
    • MORE
  • JPMorgan (Feroli)
    • Forward guidance to repeat outlook for “gradual” hikes
    • Statement will likely stop short of speculating on a move in March; overall tone should remain upbeat
    • FOMC to say risks to outlook are “roughly balanced,” and “play it safe” by not speculating on any changes to fiscal or other federal economic policies
    • MORE
  • Morgan Stanley (Ellen Zentner, Matthew Hornbach, others)
    • Fed will likely hold off on raising rates until September
    • Odds of March hike appear low as Fed looks for inflation pressures to build and fiscal policy to take hold
    • Policy makers will deliver “positive-sounding,” “benign” statement keeping fed funds rate at 0.5%-0.75%
    • MORE
  • RBC (Tom Porcelli)
    • No Yellen press conference means “little scope” for major shifts; meeting should “come and go with little market implications”
    • Fed may upgrade inflation description with slightly more hawkish slant; “way too early” for reinvestment discussion to make its way into the statement
    • Looking ahead, there’s “good chance” Fed will talk more about balance sheet reduction rather than hiking outright in March; “very strong data” and “clear signs” that fiscal/tax reform is on accelerated timeline are needed for March hike to occur
  • Standard Chartered (Costerg)
    • Fed will likely discuss timing of balance sheet’s “passive shrinking”
    • Issue may appear in minutes of meeting, may be further discussed at March meeting
    • Fed will keep rates on hold for several months; Standard Chartered sticks with prior call for next hike in December, sees end of reinvestments in 1Q 2018
    • MORE
  • TD (Michael Hanson, others)
    • Fed won’t send any “overt” signals about March; “very low chance” Fed will change fifth paragraph on reinvestment program
    • Central bank is preparing markets for “more serious conversations down the road”; discussions expected to start “in earnest” around early 2018, with tapering process beginning in mid-2018
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Blerina Uruci (Barclays PLC)
Christopher Low (Ftn Financial)
Ellen Zentner (Morgan Stanley)
Ian Gordon (Bank of America Corp)
Jim Vogel (Ftn Financial)

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UUID: 7947283

HALISTER1: ReutersBreakingviews: RT @gfhay: Deutsche's mirror trades are bad enough, but 1/3 of banks dismiss money-laundering allegations

ReutersBreakingviews: RT @gfhay: Deutsche's mirror trades are bad enough, but 1/3 of banks dismiss money-laundering allegations

Alert: HALISTER1
Source: TWT (Twitter)

Topics
Major Media Tweets
Twitter Verified Handles

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UUID: 7947283

HALISTER1: U.S. ECO PREVIEW: Consumer Confidence Due in 5 Minutes

U.S. ECO PREVIEW: Consumer Confidence Due in 5 Minutes

(Bloomberg) -- Conference Board’s Consumer Confidence Index seen at 112.8 in Jan. vs 113.7 in Dec. (forecast range 108 to 116); index based on random sample of ~3k households.
  • “Stock prices have climbed, and the employment situation has improved, which should keep the headline elevated in the event that some post-election euphoria has waned": Bloomberg Insight
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283