THE MORNING BENCHMARK - Customer Zone
Transcription
THE MORNING BENCHMARK - Customer Zone
THE MORNING BENCHMARK PRODUCED BY REUTERS, TRADEWEB AND IFR MARKETS Thursday, April 23, 2015 EURO ZONE BUSINESS SURVEYS MORNING MEETING FROM IFR Click on the chart for full-size image DATA • 08:30 Jobless Claims (Apr 18 wk) (mkt 290k, prev 294k) • 08:30 -- Continued Claims (Apr 11 wk) (mkt 2.300 mln , prev 2.268 mln) • 09:45 Markit Manufacturing PMI (flash Apr) (mkt 55.5, prev 55.7) • 10:00 New Home Sales (Mar) (mkt 513k SAAR, prev 539k SAAR) • 11:00 Kansas City Fed Manufacturing Production Index (Apr) (prev -2) • 11:00 Kansas City Fed Composite Index (Apr) (prev -4) EVENTS • 09:15 Federal Reserve Division of Banking Supervision and Regulation Deputy Director Hunter testifies on community bank regulations before the House Financial Services subcommittee on financial institutions and consumer credit; Washington, DC • 14:00 Senate Finance Committee holds hearings on Treasury nominations (Deputy Under Secretary and CFO) TOP NEWS Europe, China business activity disappoint in April UK's Osborne avoids deficit slip-up, retail sales fall Greek cash seen lasting into June, no EU deal imminent ECB's Praet urges countries to reform for recovery to last U.S. home sales vault to 18-month high as supply improves Germany's private sector expands less than expected in April INSIGHT Part-time 'slack' may be nearing its end as Fed debates hike U.S. part-time employment is fast-approaching levels common since the 1970s in a sign that a key part of labor market slack may be almost gone, giving the Fed one less reason to delay hiking interest rates frozen near zero for more than six years. Central bankers watch the part-time figures as a measure of labor market health. While current part-time numbers remain high compared to the hot job markets of the 1990s and early 2000s, they are closing in on the longer term average. A ReutersIpsos online poll found a potentially modest gap between the hours workers want and what they can find. More than a third of those working fewer than 30 hours a week and asked how much they wanted to work for the same hourly rate were satisfied with their current hours or wanted to work less. While others wanted more hours, only 23 percent said they wanted to commit to a traditional 40-hour week. Among those working more than 30 hours a week, there was a significant desire to scale back almost a fourth of that group said they wanted to work between one and 18 fewer hours ISSUANCE • 11:00 Treasury announces 3- and 6-month bills (e: $24/24 bln) and 52-week bills (e: $25 bln) • 11:00 Treasury announces 2-, 5- and 7-year notes (e: $26/35/29 bln) • 13:00 Treasury auctions $18 bln new 5-year TIPS MARKET BIAS • The tactical bias is that of a defensive range trader as a lightly supported market appears as ill equipped for next week’s treasury coupon supply. • Look for a 2.00%-to-1.94% range in 10s favoring the selling of strength. • The strategic bias is flat, though will look to sell a 50% position in the 7-year at 1.70% if hit. • The curve bias entered a 5s/30s flattener at 125 bps as a setup trade for next week’s intermediate-dated treasury supply TECHNICAL OVERVIEW Cash Support and Resistance 5-year 10-year Resistance 1.35% 1.94% Support 1.43% 2.01% Best Trade: 10-Year Dec Contract Position Entry Stop Exit Buy 128-26 3/32 129-080 Reason: Trade can rebound to test recent range lows For more, click here For more, click here For more stories from IFR Markets For more market data Market Preview, click here MBS Volume Summary, click here Tradeweb Markets update, click here Thomson Reuters CDS Biggest Movers, click here Thomson Reuters Loan & Bonds movers, click here THE MORNING BENCHMARK April 23, 2015 MORNING MEETING FROM IFR (continued) OVERNIGHT TREASURIES • Bonds higher and flatter amid better buying after Wednesday’s slide • Bunds lead bounce, 10s/Bunds widens a little more to +181.3 bps on Tradeweb • Bits of better buying overall from Japan, Asia, Europe • Good volume, 175k 10-year futures trade by 06:25 EST • June 10s mark 129-02/128-25 range, last at 129-00.5 GILTS • Gilts bounce after 119.19 low Wednesday • Weak retail sales helps briefly • Gilts weak under 119.95/120.00 • 10yr capped by 1.72% former Fibo • 2s/10s breaking up through 116bp region • 10yr UK/Germany struggles to advance further • SSTG curve flatter after opening bear steepening extension OVERNIGHT NEWS RECAP • European remain choppy with influences wide and varied • Greece restructuring proposals due at Eurogroup meeting Friday • Eurogroup set to discuss migrant problem • China April PMI overnight 49.2 vs 49.6 exp stabilizes FI • Brent crude sideways after recent correction • Spanish unemployment 23.78% in Q1 vs 23.60% • UK retail sales 0.5% m/m (exp 0.4%) ex fuel 0.2% m/m (exp 0.4%) • UK PSNB 6.741bn (exp 7.000bn) • French mfg PMI 48.4 vs exp 49.2, German 51.9 vs exp 53.0, EUR 51.9 vs exp 52.6 • French serv PMI 50.8 vs exp 52.5, German 54.4 vs exp 55.5, EUR 53.7 vs exp 54.5 RATES SNAPSHOT OVERSEAS SOVEREIGNS JGBs • 10-yr (#338) +1bp at 0.31% (0.305%-0.315); 2-yr (#351) flat at -0.005% • 10-yr June JGB futures: -0.08 at 147.95 (147.89-148.02) (Volume: 22,075) • 5s +0.5bp (0.07%), 20s +0.5bp (1.07%), 30s +1.5bp(1.31%), 40s(#7) +1.5bp • Yields on new 40s (#8) briefly fall from 1.484% to 1.455% after tepid auction • JGB players widely expect BoJ to buy S/L JGBs tomorrow, including new 40s • JGB prices ended the day slightly lower, sending yields up 0.5bp to 1.5bp from yesterday. Dow Futures -51, S&P Futures -5 EGBs • Bunds bounce after 159.11 low Wednesday • Poor under 159.82 breakdown • Greece tries to extend rally after correction this week • Peripheral rally stalls after big day yesterday • 5s/30s Germany marginally flatter • 5s/30s Italy held by 172bp then 182bp • Portugal places 3.125bn Feb 2024s and 875.8mn Feb 2030s in debt swap • EUR/USD modestly higher, tight range persists • EUR stocks typically lower EUROSTOXX 50E down 1% • Brent sideways after rally Wednesday • Copper briefly under mid month lows [email protected] 10-yr Current Yield Spread to Trsy (bps) US 1.956% JGB 0.310% -165 BUND 0.144% -181.5 GILTS 1.693% -26.5 data supplied by Tradeweb EQUITY RECAP NIKKEI 225 20187.65, +53.75 NIKKEI consolidates gain above 20k after 15 yr wait DAX 11758 -106 FTSE 100 7039, +11 FTSE gains as others retreat FX SNAPSHOT USD/JPY 120.01 EUR/USD 1.0742 COMMODITY SNAPSHOT Gold $1189 +$2, Oil $55.97, -$0.20 SPREAD PRODUCT OUTLOOK MORTGAGES • 30yr FNMA CC 2.69%; +63/10yr swaps. +70/10yr note, +99/5&10yr blend • Rising yields attract buyers, many moving UIC as a result • Modest fade, upper 4s and 4.5s away from any rates rally 2 THE MORNING BENCHMARK April 23, 2015 INSIGHT (continued) each week. (Graphic httplink.reuters.comtyb64w) With the jobless rate of 5.5 percent near pre-crisis levels, Fed policymakers are studying other aspects of the labor market as they weigh whether to raise rates in June or wait for more evidence of an improving economy. Government labor surveys show the share of employees who say they want to work full time but could only find part-time work was 4.5 percent in March, down from 6.5 percent at the end of the recession in 2009 and approaching the average of roughly 3.9 percent since 1975. The share of those who choose to work part-time because of family and health constraints, lifestyle preferences, or other reasons, is around 13 percent, a level that has been relatively stable since at least the 1970s. In recent years that group has changed little in its demographics - about 60 percent female and skewed towards younger and older workers - and in the numbers who cite child care, medical or other issues as the reason for working part-time. It is striking how stable the relationships have been, said Ariane Hegewisch, a research director at the Institute for Women's Policy Research in Washington. As it analyzes the steady fall in those forced into part-time work by the weak economy, the Federal Reserve now must judge whether the tight labor markets of the 1990s and early 2000s remain a good benchmark. Some Fed officials say higher levels of part-time work might be the new norm because of changes in employment patterns. Some industries are moving towards more of a part time model, Atlanta Fed president Dennis Lockhart said this month. While he said he regards the more than 6 million people who work parttime for economic reasons as too many, he is not sure how low the figure can go. (Graphic anatomy of part timershttplink.reuters.comqez54w) Fed officials and economists generally agree that more of the current part-timers could move into full-time jobs. The question is whether that potential involves millions more workers or the roughly 900,000 that would bring part-time levels back to their average since the 1970s - a target that may be just a few months away. Andrew Levin, a former Fed economist and now a research fellow at the International Monetary Fund, argued in a recent paper that the economy's performance from 1994 to just before the recession was an appropriate yardstick and suggested a substantial underemployment gap. Between 1994 and 2007 the involuntary part-time workers - those whose hours were cut or who could only find part-time work - made up about 3 percent of those employed. Until inflation starts to rise, he said, there is still room for involuntary part-time work to fall. One view would be to say...Maybe we are done, absorbing parttime labor, Levin said. But we have been persistently falling below two percent (inflation)...If you want price stability the best thing you can do is push employment to its maximum. Others point to the tepid pace of wage growth, low labor force participation, and other data as evidence of continued slack. Minneapolis Fed President Narayana Kocherlakota and some other policymakers argue, consequently, for delaying rate hikes until at least next year. In Kocherlakota's district, Minneapolis resident Sivya Leventhal exemplifies the flux the Fed wants to understand. While her husband, laid off from a local TV station, looks for a full-time job, she works part-time at the preschool in her synagogue to help pay bills. Leventhal has a college degree and full-time experience, but wants to stay part-time until her son is older. Financially it would make more sense but we are committed to this, she says. Behind some of the numbers are also career choices that may not have existed a few years ago. Amanda Gay, 34, became a part-timer as part of a career reset. The 2003 University of Georgia graduate ditched a full-time management job with a non-profit, signed up for health insurance through a government-run exchange and used the webbased FlexJobs service to find part-time work teaching English online while she considers moving overseas. There is no one-size fits all choice anymore. NEW NORMAL Fed governor Jerome Powell in a recent speech in New York said present levels of part-time work could well be a new normal because of the scars of the Great Recession For Michelle Paradis, 34, one of about 11,000 workers who responded to the ReutersIpsos poll, part-time work was neither quite an independent choice nor a clear sign of economic slack. She limits her work to 16 hours a week in a hair salon to stay under the federal $1,090 monthly earnings limit for social security disability recipients. It adds up to a liveable wage, says the mother of three. --By Howard Schneider IFR MARKETS PREVIEW Higher and flatter as overseas accounts buy dip overnight Seng dipped 0.4%. Within Europe, peripheral bond markets have spent the day on the fence - for example 10-year Italian bonds are 1bp wider to Bunds while 30-year Italian bonds are 3bp tighter. Gold has bounced to $1,189.63 while oil has dipped modestly to $56.05. The euro is modestly better at EUR/USD1.0741, but the pound is down ¼ big figure to GBP/USD1.5006, while the yen is marginally softer at USD/JPY119.94. Bonds are higher and flatter in decent volume with some 175k 10-year futures trading by 06:25 EST. A modest bounce in Bunds, up ¼ point, has also helped 10-year futures and as a result 10s/Bunds has widened a half a bp to +181.4bp, on Tradeweb. Customer flows show better buying from overseas accounts with Japan/Asia and Europe all lifting the market. June 10s have marked a range of 129-02/128-25, last at 129-00.5. Extra help has also come from stocks where S&P futures are down over five points, and have almost given up Wednesday’s gains. The Eurostoxx50 is also down, by 0.9%, while the Nikkei firmed 0.3%, the Shanghai Composite rose 0.4%, and the Hang [email protected] 3 THE MORNING BENCHMARK April 23, 2015 TOP NEWS Europe, China business activity disappoint in April UK's Osborne avoids deficit slip-up, retail sales fall Business activity slowed more than any forecaster expected in the euro zone this month while manufacturing in Asia's top two economies hit the brakes, suggesting the global recovery path is less clear than policymakers are predicting. The sudden drop in the euro zone flash composite Markit PMI was driven by sharply slower growth in manufacturing orders in Germany and France, suggesting recent optimism about the euro zone may be overdone. This marks the first major euro zone indicator that has disappointed all forecasts in quite some time, and comes just a month after the ECB began purchasing government bonds to stimulate the economy. The euro zone composite PMI fell to 53.5 from 54.0. In China, where the government has been engineering a rebalancing of its economy away from relying too much on exporting manufactured goods towards domestic spending, the flash PMI fell to a one-year low of 49.2 from 49.6. Japan's PMI also slid, to 49.7 from 50.3 in April, as new orders continued to shrink and manufacturing production fell for the first time since July 2014. The data showed an increase factory hiring, however. In the United States, the pace of expansion in manufacturing is expected to have moderated slightly, but it still growing at a faster pace than in Europe. Markit's flash U.S. manufacturing PMI is expected to ease slightly to 55.5 from 55.7 in March. British finance minister George Osborne met his target for lowering the country's budget deficit in the 2014/15 financial year, avoiding an embarrassment two weeks before a national election. The Office for National Statistics said that retail sales in March unexpectedly fell, hit by the biggest slump in fuel sales in just under three years, potentially adding to concerns about a slowdown in economic growth in early 2015. On the public finances, public sector net borrowing totalled 7.4 billion pounds in March, down 5.6 percent from a year earlier and the lowest for that month since 2004. The shortfall for the financial year fell to 87.3 billion pounds, comfortably below the latest projection of 90.2 billion pounds set out by Britain's independent budget forecasters which acts as Osborne's target. March's public finances were boosted by an increase in income tax revenues and national insurance contributions which rose nearly 4 percent. In the 2014/15 financial year as a whole, income tax was its highest on record, the ONS said. Public sector net debt excluding state-controlled banks totalled 1.484 trillion pounds in March, equivalent to 80.4 percent of gross domestic product. The ONS said that retail sales fell 0.5 percent in March compared with February and were up 4.2 percent compared with March last year. Greek cash seen lasting into June, no EU deal imminent ECB's Praet urges countries to reform for recovery to last Greece can scrape together enough cash to meet its payment obligations into June, euro zone and Greek officials said on Wednesday, playing down fears of an imminent default as hopes receded of a deal with its creditors to release fresh aid. The ECB raised its ceiling on emergency lending by the Greek central bank to Greek banks by 1.5 billion euros to 75.4 billion euros, giving them a bigger buffer to cope with deposit withdrawals, a banking source said. Three sources familiar with ECB thinking denied a report that it had tightened the screws on Greek banks by slashing the value of the collateral they must present to receive emergency liquidity to stay afloat. The head of the Eurogroup Working Group said Athens would not present a new list of economic reforms required to unlock further EU funds when the ministers meet in Latvia on Friday, but Greece should be able to stay solvent till June. Greek Deputy Finance Minister Dimitris Mardas said the government aimed to have a 2.5 billion euro cash buffer by forcing state entities to lend to the state in order to cover payments until the end of May. Countries in the euro zone need to reform in order for the economic recovery to become a lasting one, the European Central Bank's chief economist said, saying one such step would be to loosen regulation for employers. Peter Praet's remarks are the latest instance of the ECB putting pressure on countries to do their bit for the economy after the central bank launched a trillion-euro-plus money printing scheme. In contrast to earlier comments from ECB policy setters, which have typically been more general, Praet gave specific suggestions, citing French regulations for firms with more than 50 staff as a hindrance to companies. Despite the general improvement in the economic picture, Praet warned of structural problems including the rising number of long-term unemployed and underscored the need for investment. Germany's private sector expands less than expected in April Growth in Germany's private sector slowed slightly in April, a survey showed, suggesting that the government's cautious growth forecast for Europe's largest economy might prove justified. Markit's flash composite PMI, which tracks manufacturing and services activity accounting for more than two-thirds of the economy, fell to 54.2 from March's eight-month high of 55.4. However, that was still comfortably above the 50 mark dividing growth from contraction for a 24th consecutive month. The sub-index for the manufacturing sector unexpectedly dropped to 51.9 from 52.8 in March. The sub-index for services also unexpectedly fell with a lower reading of 54.4 after 55.4 last month. Meanwhile, French business activity barely grew in April, due to a slower expansion than forecast in the services sector and a faster contraction than expected in manufacturing. The PMI for the services sector compiled by Markit fell to 50.8 compared with 52.4 in March. The manufacturing sector contracted slightly more than in March, with the PMI dropping to 48.4 from 48.8 the previous month. U.S. home sales vault to 18-month high as supply improves U.S. home resales surged to their highest level in 18 months in March as more homes came on the market, a sign of strength in housing ahead of the spring selling season. The fairly upbeat report from the National Association of Realtors on Wednesday implied the economy was regaining some momentum after hitting a speed bump at the start of the year. But tepid retail sales and weak factory data suggested the growth rebound will probably be insufficient to convince the Federal Reserve to raise interest rates in June. Existing home sales increased 6.1 percent to an annual rate of 5.19 million units in March, the highest level since September 2013. The percent rise was the largest since December 2010. The outlook for the spring selling season was also boosted by a separate report showing applications for loans to purchase homes jumped 5 percent last week to the highest level since June 2013. 4 THE MORNING BENCHMARK April 23, 2015 MBS CLOSE FROM IFR MARKETS - April 22 Going out at the tights one to three ticks from those points. The 30yr FNMA Current Coupon gained five basis points to 2.69%; +63/10yr swaps, +99/5yr-10yr blend, and +70/10yr notes. 15/30 swaps were up a couple of ticks in production space; G2/ FNs rallied another 1+ to 2/32, while 30yr FNMA coupons decompressed 1/8 point. Rate sheet sensitive FN3.5/3s are just below +2 7/8 points, FN4/3.5s are right near two points, and the UIC swap (FN4.5/3.5s) is within a few ticks of four points. The economic calendar for Thursday entails the usual bevy of weekly data starting at 8:30 a.m. along Jobless Claims (294k last), 10 a.m. FHLMC PMMS mortgage rates (30yr fixed 3.67%), as well as the 2 p.m. NYFRB MBS Agency purchase rehash ($8.847 billion previous). Also at 10 a.m., March New Home Sales are revealed and expected lower from the 539k print last time around. At 11 a.m. Treasury announces details of next week’s fixed rate (2s/5s/7s) and floating rate (2yr) supply needs, and at 1 p.m. will auction $19 billion 5yr TIPS. The New York Federal Reserve comes back for more Class A tomorrow as $1.85 billion is the maximum normal this cycle. Between 11:15-45 a.m. the Fed will buy 30yr FNMA and FGLMC 3s and 3.5s. Mortgage-backed securities are going out at the tights of the day, with the upper belly leading as it has all session. Much the same story as Tuesday, with 30yr 4s and 4.5s prospering as yield buyers push up and away from the lower/supply laden bottom section. With the Fed supporting lower 3s and 3.5s, that left those coupons in a modest stalemate. Dollar rolls were again the story as well, with the aforementioned coupons seeing their May/June drops rising 1/4 tick as few wish to get caught short on the next 48-hour period, apparently. If you recall, those rolls had near double digit handles into allocations. Back to the Fed, the NYFRB took $2.6 billion Class A and C bonds out of secondary circulation (http://www.newyorkfed.org/ markets/ambs/operations/results.html).The combined numbers had a hit ratio of 26% and percentage allocated of 97% of the $2.775 billion originally slated for removal. 30yr mortgage prices are closing at the low points, with bottom coupons off six to 9/32 while the upper region is actually flat to higher a tick. 15yrs are off 1/8 point, as 2s10s curve steepens several basis points to +143, stocks rally 1/2 percent, while swaps narrow (5y tenor 15.50, 10y 7.25, mid markets), and vols straddle unchanged (3m10y 78.8, 5y10y 87.0). MBS spreads are five ticks tighter to Treasuries in the belly of 4s and 4.5s, a tick wider from there versus swaps, with adjoining coupons back [email protected] TRADEWEB MBS VOLUME SUMMARY FROM IFR MARKETS - April 22 Tradeweb Summary • At the 3 p.m. close, the 10-year Treasury note was marked down 16+/32 to 100-08 (1.972% yield); the 2s10s curve was over three basis points steeper to +142. The backup was attributed to a sell-off in German bunds and to better than expected Existing Home Sales in March. • After two days of below normal volume in MBS, it picked up today to 106% of the 30-day moving average. • Volume balance between 15s and 30s today was within normal ranges of 17.5% and 82.5%, respectively. Sector All [email protected] 5 Total Volume Vs 30-Day Avg 106% FHLMC 15yr 39% FHLMC 30yr 112% FNMA 15yr 117% FNMA 30yr 109% GNMA 30yr 78% THE MORNING BENCHMARK April 23, 2015 TRADEWEB MARKETS AS OF 7:00 AM ET U.S. TREASURIES BID ASK <27075> YIELD CHANGE UK GILTS 2-Year 99.914 99.922 0.541 -0.004 2-Year 102.135 102.162 0.520 0.053 2-Year 100.190 100.222 0.003 0.001 3-Year 99.609 99.617 0.881 -0.011 5-Year 103.616 103.644 1.285 0.108 5-Year 100.117 100.185 0.076 -0.010 5-Year 100.023 100.031 1.368 -0.018 10-Year 130.067 130.107 1.681 0.184 10-Year 100.796 100.941 0.317 -0.107 7-Year 100.219 100.234 1.714 -0.017 30-Year 122.676 122.776 2.425 0.372 20-Year 102.015 102.266 1.077 -0.185 10-Year 100.391 100.406 1.954 -0.016 30-Year 104.081 104.327 1.310 -0.315 30-Year 2.633 -0.020 97.234 97.266 USD IRS SWAPS SPREAD 2-Year 0.260 0.265 3-Year 0.220 0.228 5-Year 0.155 0.160 7-Year 0.073 0.078 10-Year 0.070 0.075 30-Year -0.240 -0.235 EUROPEAN GOV’T DEBT BID <TWEBIRS> RATE 0.803 0.809 1.103 1.109 1.524 1.528 1.787 1.791 2.025 2.029 2.394 2.398 ASK BID <0#GBBMK=TWEB> ASK YIELD CHANGE GBP IRS SWAPS 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year 0.974 0.984 1.164 1.174 1.435 1.445 1.609 1.619 1.773 1.783 2.078 2.091 EUR IRS SWAPS 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year 130.071 130.111 1.681 0.188 BTPS-10Year 109.979 110.069 1.381 0.122 SE-10Year 121.332 121.741 0.299 0.357 RAGB-10Year 113.145 113.282 0.232 0.234 OLO55-10Year FRTR-10Year PGB-10Year 105.550 101.138 108.176 105.977 101.203 108.628 1.218 0.385 1.956 0.103 0.290 0.222 IRISH-10Year 144.263 144.592 0.737 0.317 RFGB-10Year 137.724 137.837 0.236 DBR-10Year 103.528 103.562 0.134 NETHR-10Year 99.744 99.814 0.275 0.300 <0#JPBMK=TWEB> ASK YIELD CHANGE BID <TWEBIRS> RATE <TWEBEURO> YIELD CHANGE UKT-10Year JGBs JPY IRS SWAPS 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year <TWEBIRS> RATE 0.139 0.144 0.153 0.158 0.225 0.295 0.336 0.341 0.515 0.520 1.285 1.300 <TWEBIRS> CDS - U.S. (previous day’s close) RATE CLOSE CHANGE 0.067 0.071 CDXIG.23.V1.5Y 61.2204 0.230 0.101 0.106 CDXHY.23.V1.5Y 107.438 -0.048 0.211 0.217 0.328 0.333 0.489 0.494 0.777 0.787 CDS - Europe 0.286 BID ITEEU.18.V1.5Y 59.789 ITEXO.18.V1.5Y 264.887 ASK 60.3623 267.191 0.260 ITEFA.18.V1.5Y 71.987 GGB-10Year 49.632 51.364 12.163 0.949 SPGB-10Year 102.105 102.293 1.373 0.130 DGB-10Year 115.417 116.032 0.212 0.321 71.034 All data below is from previous day's close ACTIVE FANNIE MAE AGENCIES TERM <27096> COUPON MATURITY 3-Year 5-Year 10-Year 30-Year 1.000 1.625 2.625 6.625 09/27/2017 01/21/2020 09/06/2024 11/15/2030 SPREAD 26.0 9.5 25.5 8.8 Active MBS 30YR FNMA FHLMC GNMA CPN BID 3.000 3.000 3.000 102.109 101.922 103.000 -28.7 -1.4 22.3 48 ACTIVE FREDDIE MAC AGENCIES BID YIELD TERM 2-Year 3-Year 5-Year 10-Year 30-Year 0.813 1.485 2.225 2.736 <7687> - 89 ASK 102.125 101.938 103.078 6 <27096> COUPON MATURITY — — SPREAD — BID YIELD — — 0.875 22-02-2017 5.000 -15.400 0.603 0.875 2.375 6.250 07-03-2018 3.500 13-01-2022 12.500 15-07-2032 15.700 -15.000 8.600 51.800 0.932 1.861 2.805 THE MORNING BENCHMARK April 23, 2015 THOMSON REUTERS CDS BIGGEST MOVERS Convention spread for lower risk entities is based off the 100bp fixed coupon, while the convention spread for higher risk en tities is based off the 500bp fixed coupon. All data below is from previous day's close CREDIT IMPROVEMENT - LOWER RISK ENTITIES (CDS whose 5Yr spreads are <500bps) CREDIT DETERIORATION - LOWER RISK ENTITIES (CDS whose 5Yr spreads are <500bps) NORTH AMERICA NORTH AMERICA Name RIC ConvSprd % Chg Name RIC DISCOVER FIN TOYOTA MOTOR CR ConvSprd % Chg <MSDF5YUSAX=R> 114.38 -11.12 CSX CORPORATION <TOYA5YUSAC=R> 50.59 -8.14 MAGELLAN MIDSTR <CSX5YUSAX=R> 20.74 7.74 <MMP5YUSAX=R> 92.99 ENTERPRISE PROD <EPDE5YUSAX=R> 77.34 -6.07 7.48 BAXTER INTERNAT <BAX5YUSAX=R> 30.66 ENTERPRISE PROD <EPD5YUSAX=R> 78.69 6.94 -5.65 TIME WARNER CAB <TWD5YUSAX=R> 99.49 ONEOK PARTNERS, <OKS5YUSAX=R> 148.02 4.18 -5.12 SUNCOR ENERGY I <SU5YUSAX=R> 79.99 3.82 EUROPE/ MID EAST/ AFRICA EUROPE/ MID EAST/ AFRICA Name RIC ConvSprd % Chg Name RIC BAYERISCHE LAND <BLB5YEUAM=R> 75.16 -11.68 EVN AG <EVNV5YEUAM=R> ConvSprd % Chg 84.86 5.84 HYPOTHEKENBANK <EUHY5YEUAM=R> 80.13 -5.83 DEXIA CREDIT LO <DEXC5YEUAM=R> 182.25 4.29 STANDARD CHARTE <STAN5YEUAM=R> 67.20 -5.60 IBERDROLA INTER <IBER5YEUAM=R> 77.27 4.01 ANGLO AMERICAN <AAL5YEUAM=R> 179.24 -5.47 VOLVO TREASURY <VOLA5YEUAM=R> 107.20 3.33 NATIONAL WESTMI <NWB5YEUAM=R> 69.18 -5.47 TESCO PLC <TSCO5YEUAM=R> 170.81 3.30 ASIA PACIFIC ASIA PACIFIC Name RIC ConvSprd % Chg Name RIC HONDA MOTOR CO. <HONB5YJPAC=R> 20.96 -18.89 AIR CHINA LIMIT <AICN5YUSAC=R> 182.79 11.28 HONDA FINANC <HONE5YJPAC=R> 20.96 -18.89 CHINAM <CMHI5YUSAC=R> 156.40 8.44 MIZUHO BANK, LT <MZFC5YUSAC=R> 47.56 -13.21 ORIX CORPORATIO <ORIA5YJPAC=R> 56.62 7.77 -4.63 NIPPON STEEL CO <NIPB5YJPAC=R> 43.33 3.61 -3.98 JFE HOLDINGS, I <JFEH5YJPAC=R> 46.78 2.23 SUMITOMO CHEMIC SOFTBANK CORP. <SMCH5YJPAC=R> <SFTB5YJPAC=R> 39.74 119.75 ConvSprd % Chg CREDIT IMPROVEMENT - HIGHER RISK ENTITIES (CDS whose 5Yr spreads are >=500bps) CREDIT DETERIORATION - HIGHER RISK ENTITIES (CDS whose 5Yr spreads are >=500bps) NORTH AMERICA NORTH AMERICA Name RIC ConvSprd % Chg Name RIC ConvSprd % Chg MBIA INSURANCE <MBIA5YUSAX=R> 1219.70 -3.17 AVON PRODUCTS, <AVP5YUSAX=R> 550.51 0.59 PEABODY ENERGY <BTU5YUSAX=R> 1581.08 -1.07 UNITED STATES S <X5YUSAX=R> 519.93 0.48 IHEARTCOMMUNICA <CCU5YUSAX=R> 2120.64 -0.07 ASIA ALUMIN <ALMI5YUSAC=R> 4209.56 0.09 EUROPE/ MID EAST/ AFRICA EUROPE/ MID EAST/ AFRICA Name RIC ConvSprd % Chg Name RIC OPEN JOINT STOC <ROSN5YEUAC=R> 559.83 -3.38 HELLENIC TELECO <OTE5YEUAM=R> 664.59 0.60 RUSSIAN AGRICUL <RSSB5YUSAC=R> 577.92 -2.18 PORTUGAL TELECO <PTCF5YEUAM=R> 553.51 0.27 JSC VTB BANK <VNES5YUSAC=R> 596.66 -2.10 NORSKE SKOGINDU <NSG5YEUAM=R> 2631.52 0.05 HEMA BONDCO I B <HEMB5YEUAM=R> 944.04 -1.03 STENA AKTIEBOLA <STEN5YEUAM=R> 511.88 -0.57 ASIA PACIFIC Name RIC ConvSprd % Chg JOYO BANK <> 511.95 -0.55 7 ConvSprd % Chg THE MORNING BENCHMARK April 23, 2015 THOMSON REUTERS BIGGEST LOAN MOVERS All data below is from previous day's close CREDIT IMPROVEMENT CREDIT DETERIORATION NORTH AMERICA NORTH AMERICA Name RIC STALLION OILFIEL VANTAGE DRILLING Name RIC Avg. Bid % Chg 3.03 ARCH COAL INC <00ACIN031TB1=R> 74.38 -0.97 60.67 1.82 AMERICAN ENERGY 60.5 1.77 EDUCATION MANAGE <0EDMCO055TB1=R> <A000R0011TB1=R> 82.75 -0.54 79.5 -0.42 0.74 CHARTER COMMUNIC <C000JM0A9TG1=R> 100.7 93 -0.36 64.33 0.52 PACIFIC DRILLING 86.94 -0.36 Avg. Bid % Chg <S000C6049TB1=R> 76.5 <V0005U024TB1=R> WALTER ENERGY IN <W0006S019TB1=R> FAIRMOUNT MINERA <F0002V031TB1=R> VANTAGE DRILLING <V0005U032TB1=R> EUROPE/ MID EAST/ AFRICA <P000EJ018TB1=R> EUROPE/ MID EAST/ AFRICA Name RIC Avg. Bid % Chg Name RIC Avg. Bid % Chg BIFFA WASTE SERI <B000AF023TB1=R> 42.33 1.6 BURTON'S BISCUIT <B000EQ017TB1=R> 88.75 -0.65 AVR HOLDING <H0005S041TB1=R> 64.88 1.37 TUNSTALL HOLDING <T0007W037TB2=R> 86.08 -0.4 DUBAI WORLD LTD <D0006P040TB1=R> 83.5 0.91 JACK WOLFSKIN <A000DF039TB1=R> 90.46 -0.32 CORTEFIEL SA <C000DJ039TB1=R> 68.4 0.47 CAMAIEU SA <C000K1028TC2=R> 81 -0.31 HC STARCK GMBH <H0006H026TB2=R> 98.42 0.43 ION TRADING TECH <I0008Y024TB3=R> 100.6 -0.27 Price % Chg 53 -3.77 43.5 -2.3 THOMSON REUTERS BIGGEST HIGH-YIELD BOND MOVERS CREDIT IMPROVEMENT CREDIT DETERIORATION NORTH AMERICA NORTH AMERICA Name RIC Price BOART LONGYEAR L <09664PAA0=> 63.5 10.24 FOREST OIL CORP <346091AZ4=> 22 7.95 FOREST OIL CORP <346091BG5=> 22 7.95 SAMSON INVESTMEN <796038AC1=> 10.5 7.14 47 4.26 COMSTOCK RESOURC <205768AJ3=> Name % Chg RIC GOODRICH PETROLE <382410AF5=> ARCH COAL INC <039380AK6=> Thomson Reuters CDS index and single-name data is available in Eikon through CreditViews or by entering <REUTERSCDS> in a quote. 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