From the Securities Lending Trading Desk – Week of March 18th

In the Americas, we have seen increased demand for Turtle Beach Corp. (HEAR), a video-game headset maker, ahead of their fourth-quarter 2018 financial results. In Asia Pacific, China’s largest electric-vehicle maker is continuing to feel the effects of the central government’s decision earlier in the year to reduce subsidies to the industry. In Europe, Elliot Management Corp and Vivendi set to go to war again over Telecom Italia Spa (TIT IM) board.

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Drivers for the Week Ahead

  • Last week was one of the worst ones for the dollar since early December, but let’s put things in perspective
  • The FOMC meets Wednesday and is the highlight of the week
  • There is a fair amount of US data to be reported this week
  • Eurozone flash PMI readings for March will be reported Friday
  • UK Parliament is scheduled to hold a third vote on Prime Minister May’s Brexit deal; The Bank of England meets Thursday
  • Swiss National Bank and Norges Bank also meet Thursday
  • It’s another busy week for EM central banks

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EM Preview for the Week Ahead

EM FX ended a good week on a strong note, with virtually every currency up against the greenback. The FOMC is likely to send a very dovish message to the markets this week. While this should help EM gain, we note that risk assets generally did not do well after the January FOMC and March ECB meetings. We think that global growth concerns will become more of an issue in the coming days. Continue reading “EM Preview for the Week Ahead”

From the Securities Lending Trading Desk – Week of March 11th

In the Americas, Eli Lilly and Company (LLY) completes a spin-off of its remaining interest in Elanco Animal Health (ELAN). In Asia Pacific, a new announcement caused shares in Kawasaki Kisen Ltd to slide as much as 10%. In Europe, UK retail is a focus for borrowers again this week as Debenhams returns to the headlines.

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Drivers for the Week Ahead

  • The dollar is seeing some profit-taking after the jobs report
  • The US data schedule is jam-packed this week
  • The UK parliament is scheduled to vote on May’s Brexit plan Tuesday
  • Bank of Japan meets Friday and is expected to keep policy on hold
  • Norway and Sweden both report February CPI this week
  • China reports February IP and retail sales Thursday

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EM Preview for the Week Ahead

EM FX came under great pressure last week despite the ECB’s dovish hold. Markets instead focused on the grim eurozone economic outlook, which comes within the context of a broader global slowdown. It’s clear that EM needs more than just the liquidity story, though that may be tested too with the spate of US data releases (retail sales, CPI, and PPI) out this week. We remain negative on EM. Continue reading “EM Preview for the Week Ahead”

From the Securities Lending Trading Desk – Week of March 4th

In the Americas, demand for Mattel, Inc.(MAT) remains stable as the toy maker looks to recover from a difficult 2018. In Asia Pacific, Standard Chartered Plc also announced that it will restructure operations into hubs focused in Hong Kong, Singapore and London. In Europe, Aston Martin is back in the spotlight after falling the most since its controversial initial public offering last year.

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On a positive note: Securities Lending 2019

Last year, was a turbulent year for global markets and from a securities lending perspective, it offered numerous opportunities to generate returns in what became a banner year for many lending programs. This year, we expect many of the core themes of last year will continue leading to another broadly positive year for securities lending returns.

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Drivers for the Week Ahead

  • The dollar rally continues despite President Trump’s complaints over the weekend that it is too strong
  • The US 10-year yield traded at 2.76%, the highest since January 28
  • The February jobs data Friday could be an important catalyst for even higher US yields
  • ECB meeting Thursday will be the highlight of the week in Europe
  • China’s annual National People’s Conference begins in Beijing Tuesday; reports suggest the US and China are nearing a deal on trade
  • Reserve Bank of Australia meets Tuesday; Bank of Canada meets Wednesday
  • It’s another busy week of EM central bank meetings

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