|Bid||75.59 x 0|
|Ask||75.60 x 0|
|Day's Range||75.13 - 75.69|
|52 Week Range||71.22 - 77.96|
|Beta (5Y Monthly)||0.91|
|PE Ratio (TTM)||12.09|
|Earnings Date||Feb 26, 2020|
|Forward Dividend & Yield||2.96 (3.93%)|
|Ex-Dividend Date||Jan 08, 2020|
|1y Target Est||78.79|
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Where the euro goes next may be all about investor positioning.The common currency has slipped to the lowest since 2017 versus the dollar, yet this hasn’t deterred asset managers from accumulating the largest net long position on record. The move is more in line with the view of hedge funds, who are the most negative on the euro in three years, according to the latest Commodity Futures Trading Commission data.And while the increased bearishness of these leveraged funds should be expected given their flexibility to quickly respond to short-term fluctuations, the positioning across institutional investors may have taken some by surprise. The direction for the euro may therefore come down to who adjusts their exposure from multi-year extremes first.The common currency has come under pressure in both the spot and options markets on concerns over the coronavirus outbreak’s effect on the euro-area economy and the potential for a response through monetary stimulus by the European Central Bank. Options gauges signal traders are the most bearish on its short term prospects in five months, while they hold neutral bets over the longer term.Technically, there are signs the euro could see a relief rally in the short term, yet it remains on a bearish path in the medium term. It traded as much as 0.2% stronger Monday at $1.0851, rising for the first day in four.NOTE: Asset managers are institutional investors, including pension funds, insurance companies and mutual funds. Leveraged funds are typically hedge funds and other speculative money managersNOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment adviceTo contact the reporter on this story: Vassilis Karamanis in Athens at firstname.lastname@example.orgTo contact the editors responsible for this story: Dana El Baltaji at email@example.com, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Rating Action: Moody's assigns provisional ratings to seven classes of Canadian RMBS certificates to be issued by Prime Structured Mortgage Trust. Global Credit Research- 14 Feb 2020. Toronto, February ...
(Bloomberg) -- The Federal Reserve Bank of New York will shrink its repurchase-agreement operations more than analysts expected, starting with Friday’s overnight offering, a sign officials are comfortable removing liquidity without upending funding markets.The central bank on Thursday announced a new schedule for both overnight and 14-day term repo operations through March 12. Starting next week, the term offerings will drop by $5 billion, to a maximum of $25 billion, and those starting March 3 will shrink again, to a maximum of $20 billion. The bank’s daily overnight operations, meanwhile, will drop by $20 billion, to a limit of $100 billion.This marks the second straight month the Fed is reducing liquidity injections. It said in mid-January that it would reduce term operations by $5 billion starting in February. These operations have been oversubscribed this month, but analysts say the demand from dealers hasn’t indicated renewed stress in funding markets, or concern about bank reserves. Instead, the strong bidding is seen as simply underscoring that the rates dealers can get in these operations are lower than prevailing market rates.“This decrease is a bit faster than expected,” said Gennadiy Goldberg, a senior U.S. rates strategist at TD Securities. “Given the functioning of the money markets recently, they’re probably feeling a bit more confident they can take away some of the repo support more quickly without market disruptions.”The newly scheduled offerings will provide liquidity through March 26. The Fed has been conducting repos and Treasury-bill purchases in a bid to keep control of short-term rates and bolster bank reserves. The efforts have calmed markets since the September spike that took overnight repo rates as high as 10%, and helped quell concern about a potential cash crunch at the end of 2019.The repo market has also experienced little volatility around other calendar events, such as Treasury auction settlement dates, when the market is prone to indigestion due to the influx of collateral.Fed Chairman Jerome Powell reiterated in congressional testimony this week that the central bank stands ready to adjust the operations as conditions warrant. Powell said last month the Fed would continue term and overnight repo operations at least through April.The Fed also said Thursday that it planned to continue buying $60 billion of Treasury bills each month for reserve management.To contact the reporter on this story: Alexandra Harris in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Mark TannenbaumFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- A unit of Toronto-Dominion Bank is moving ahead with what would be the first widely marketed Canadian private-label residential mortgage-backed securities deal from one of the country’s six largest banks, according DBRS Morningstar.The transaction will be backed by a C$688.3 million ($517 million) pool of home loans that were originated by three smaller lenders, according to a DBRS Morningstar document. TD Securities plans to offer C$450 million of top-rated securities with an expected maturity around Feb. 2023, according to people familiar with the matter who asked not to be named. It will be a milestone in creating a market to help disperse housing debt risk.The last RMBS deal widely marketed in Canadian dollars was conducted by a Home Capital subsidiary in September, when it issued C$425 million of securities that pooled near-prime and alternative-A mortgages. The weighted-average borrower credit score of that deal was 741, while that of TD’s Prime Structured Mortgage Trust will be 793, according DBRS Morningstar, which rated both deals.“The mortgage pool compares favorably with recent issuances seen in the Canadian market in terms of credit-score characteristics,” rating company analysts including Tim O’Neil wrote in the Feb. 11 report.A nationwide roadshow is taking place this week before the deal books are opened, so definitive terms still have to be set, people familiar with the matter said. The deal will be the first RMBS in Canada to aggregate mortgages originated by other lenders, mimicking a technique used in the securitization of mortgages guaranteed by the federal agency known as Canada Mortgage and Housing Corp, DBRS Morningstar said in an email to Bloomberg News.The volume of residential mortgages in Canada increased 5.1% in the twelve months through Nov. 30, according to data compiled by the Office of the Superintendent of Financial Institutions, or Osfi. That’s more than three times the country’s GDP growth in 2019. Uninsured mortgages grew 12% to C$759.4 billion. In contrast, insured loans declined 4.6% to C$469.5 billion over the same period, as the Federal government has sought in recent years to limit taxpayer exposure to the real estate sector.Lenders create mortgage-backed notes by packaging property loans into securities of varying risk and expected return, and there’s been little evidence that risky mortgages have become a prominent feature in Canada’s RMBS market. In addition, mortgages are “full recourse” in most of the country, meaning lenders can pursue borrowers even after they’ve walked away from the property.With a securitization deal the seller of the underlying assets can reduce the regulatory capital needed to be set aside to cover potential losses should they meet certain conditions, which includes transferring significant credit risk to third parties. The seller would need to hold capital for any securitization tranches retained.TD Securities will offer only the safest portion of the transaction, specifically the bullet-pay class A notes, retaining the mezzanine and junior pieces, a person familiar with the matter said. Back in 2017, Bank of Montreal created a C$1.96 billion RMBS deal, though much of the securities were purchased and retained by the bank itself, Moody’s Investors Service said at that time.The Canadian Fixed-Income Forum, a Bank of Canada-led group made up of bond-market professionals, has been working for around two years to expand interest in RMBS. Part of their efforts include a proposed public mortgage database, the details of which would be ironed out by a working group co-chaired by the central bank, the CMHC, representatives from the six largest banks and the Canadian Bankers Association on behalf of the smaller players, according to a presentation given in October.To contact the reporter on this story: Esteban Duarte in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Nikolaj Gammeltoft at email@example.com, Christopher Maloney, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil posted the biggest gain in almost six weeks as signs that the spread of Asia’s coronavirus may be slowing boosted investor confidence that crude’s sell-off has peaked.Futures in New York climbed 2.5% on data from China that showed a drop in suspected coronavirus infections. The positive sentiment was largely undeterred by a government report showing U.S. crude stockpiles posted the largest build since November.“Markets are pricing in that we may have hit peak coronavirus fear,” said Daniel Ghali, a commodities strategist at TD Securities. “Investors that were bearish are thinking they want to start to take their foot off the pedal.”Prices have also drawn some support from signals that OPEC and its partners may intervene to shore up the market. The coalition slashed its estimate for demand growth in the first quarter by 440,000 barrels a day, as the coronavirus hits fuel consumption in China. In a meeting with Energy Minister Alexander Novak, Russia’s key oil producers voiced support for the idea of extending OPEC+ output cuts into the second quarter, but made no final decision.Saudi Arabia has been the strongest advocate for production cuts of an additional 600,000 barrels a day. Russia has remained noncommittal, saying more time was needed to study the proposal.The Energy Information Administration reported that nationwide crude inventories rose 7.46 million barrels last week, more than double the 3.2 million-barrel increase forecast by analysts in a Bloomberg survey. The report also showed a surprise gasoline draw of 95,000 barrels.Gasoline futures surged 4.4%, the biggest rise increase since September, after a fire broke out overnight at Exxon Mobil Corp.’s Baton Rouge oil refinery in Louisiana, halting production at the fifth-biggest fuel-making plant in the U.S.West Texas Intermediate crude for March delivery gained $1.23 to settle at $51.17 a barrel on the New York Mercantile Exchange.Brent for April settlement climbed 3.3% to settle at $55.79 a barrel on the ICE Futures Europe exchange in London, putting its premium over WTI at $4.38.The market’s structure also showed signs of strengthening with the discount on front-month Brent contracts versus the second month narrowing to 12 cents, suggesting fears of a supply glut may be easing.Still, discounts have held for Brent contracts for the majority of 2020, a pattern known as contango that typically reflects oversupply.“We’ve seen a lift because in the very near term, it’s all about the virus,” says Judith Dwarkin, chief economist at RS Energy Group. “Until we’re out of the woods the market will be laser focused on slowing demand growth and if OPEC waits to implement cuts until April, it may be too late to deal with the bulge in supply.”To contact the reporter on this story: Jackie Davalos in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: David Marino at email@example.com, Mike Jeffers, Reg GaleFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Canada’s big banks may be embracing green, but that hasn’t stopped them from lending more and more money to fossil-fuel companies.The six largest lenders had C$58.8 billion ($44.2 billion) in energy loans on their books at the end of the fiscal year, a 59% jump from five years ago, even after touting billions of dollars in climate-friendly commitments. There’s little sign of that trend abating even as oil and gas companies face increasing scrutiny over the the roles they play in climate change.Much like their counterparts in the U.S. and globally, Canadian lenders are under pressure to show they’re doing their part in fighting carbon emissions and rising temperatures. They want to show they’re delivering on green promises they’ve made, yet they’re steadfast in supporting an industry that is key to Canada’s resource-heavy economy. Energy accounts for about 10% of the Canadian economy and a fifth of exports.“The Canadian banks understand there’s an issue here and they’re trying to work on it,” said Laura Zizzo, founder and chief executive officer of Toronto-based climate consultancy Mantle314.Energy financing is becoming slightly less important for the banks, which collectively lend more to the real estate and financial services industries. Oil and gas loans accounted for an average of 5.2% of corporate financing at the big banks in 2019, down from 6.3% five years ago. Bank of Montreal and Toronto-Dominion Bank bucked that trend, with oil and gas loans representing a greater share of their corporate lending after acquiring energy books from foreign banks.Bank of Montreal more than doubled oil and gas lending in five years, peaking at C$13.5 billion last year, driven up by the 2018 purchase of energy loans from Deutsche Bank AG and an overall corporate-financing surge. Chief Executive Officer Darryl White said in a BNN Bloomberg television interview last month that the bank’s support of legacy fossil-fuel clients helps them shift to a cleaner economy.“It’s all about supporting leaders who want to transition over time -- and it does take time, and it will take time -- to a lower-carbon economy,” White said.More Than DoubledAt Toronto-Dominion, Canada’s second-largest lender by assets, loans to pipeline, oil and gas firms more than doubled to C$9.22 billion since 2014, though part of the jump was from the purchase of energy loans from Royal Bank of Scotland about four years ago.While the bank “is actively supporting the transition to a low-carbon economy,” Toronto-Dominion is “aware that Canadians will rely on conventional energy sources for several more decades to sustain our economy, create jobs and support a standard of living for our customers and communities,” spokeswoman Lynsey Wynberg said in a statement.Royal Bank of Canada, the nation’s largest lender, pared loans to the industry in 2016 and 2017, but they’ve since climbed back steadily. Shifting to greener energy production requires a strong economy aided by contributions from the traditional energy sector, CEO Dave McKay said.“You need fossil-based fuels to make that transition,” he said in a Bloomberg TV interview last month. “They’re not going away overnight.”Scotiabank, CIBCMcKay’s bank is hardly alone in its support of the industry. Bank of Nova Scotia had the most energy loans last year, while Canadian Imperial Bank of Commerce CEO Victor Dodig in November gave his backing to Canada’s energy companies, saying the bank “will be there to help address the challenges and opportunities that lay ahead.”Among the country’s largest lenders, National Bank of Canada is alone in shrinking its oil and gas loan book, to C$2.75 billion last year from C$3.62 billion in 2014. Such financing represented 4.4% of overall corporate loans in 2019, almost half the portion five years earlier.Not all energy financing is equal, and more disclosures are needed to show whether loans are backing environmentally friendly projects, said Zizzo of Mantle314.“When the banks are giving a facility to an energy company, they usually don’t delineate if that’s going toward something we should think about as transition or as propping up a mature and dirtier aspect of the energy sector,” she said. “This is a real conundrum.”Fossil-fuel companies themselves are under pressure to become greener. Suncor Energy Inc. and Cenovus Energy Inc. set goals of reducing their emissions per barrel of oil produced by 30% by 2030, and Canadian Natural Resources Ltd. and MEG Energy Corp. have set long-term goals of net zero emissions from their oil-sands operations.Canada’s five biggest banks have each set targets that could support such efforts. Scotiabank was the latest, offering in November to “mobilize” C$100 billion by 2025 to reduce climate-change impacts. CIBC committed in September to support C$150 billion in environmental and sustainable finance activities by 2027, while Bank of Montreal said last June it would provide C$150 billion in capital by 2025 to companies pursuing sustainable outcomes.“It’s really great to galvanize interest in the sustainable finance that’s required,” Zizzo said. “But I think it’s really just a first step of what’s needed.”To contact the reporters on this story: Doug Alexander in Toronto at firstname.lastname@example.org;Kevin Orland in Calgary at email@example.comTo contact the editors responsible for this story: Derek DeCloet at firstname.lastname@example.org, ;Michael J. Moore at email@example.com, Daniel Taub, Steve DicksonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
TD Bank, America's Most Convenient Bank®, announced today it closed on $35.3 in bank financing used by Westhab to fund the construction of the Dayspring Commons Campus in Yonkers, New York. The apartment building and community center will address the urgent issue of homelessness and affordable housing.
TD Bank, America's Most Convenient Bank®, announced today that it has provided $18 million in financing to the Massachusetts Society for the Prevention of Cruelty to Animals (MSPCA-Angell) in part to fund the construction of a 6,000-square-foot addition to its Critical Care Unit (CCU) and medical ward.
(Bloomberg) -- The virus-induced rally in U.S. Treasuries could be brief as China stimulus and a recovery in U.S. growth rein in demand, according to BNP Paribas SA.Yields for the 10-year bond may drop to a 2016 low before rising as high as 1.95% in the next three months, said Shahid Ladha, head of G-10 rates strategy at BNP. While the coronavirus outbreak will hurt China’s economy, the rapid gains in Treasuries suggest that the market has gotten ahead of itself, he said.“It’s gone quite far in the U.S. especially with broad U.S. risky assets looking up,” Ladha said at an interview in Singapore. Convexity hedges -- where investors seek to compensate for a drop in rates by buying longer-dated bonds -- may have exacerbated the fall in yields, he said.Benchmark yields have fallen 35 basis points this year to 1.57% as investors priced in slower global economic growth and easing by central banks due to the coronavirus outbreak. The pace of the decline has stoked debate over how far the rally can go.As the death toll mounts in China, measures to contain the virus have hurt retailers and shuttered factories. The People’s Bank of China has announced stimulus to counter the fallout, including providing special re-lending funds. Officials have stressed that there’s ample policy room to deal with a crisis.“The market will try at some point to look beyond onto the considerable investment and upside that comes after, as did happen in Hong Kong, China in 2003,” Ladha said, referring to the SARS outbreak. “You try to learn from history.”Dovish FedTreasury 10-year yields fell to as low as 1.32% in 2016. TD Securities and J.P. Morgan Asset Management have predicted that subdued price pressures and dovish Federal Reserve policy may pave the way for further gains in the bonds.But, Ladha noted that the strength of the U.S. economy and decent inflation levels are likely to limit the drop in yields. Data last week showed American employers ramped up hiring in January and wage gains rebounded, bolstering the case for the Fed to keep interest rates on hold for the rest of the year.Here are some of Ladha’s other investment views:Firm favors local-currency Asian government bonds including Singapore, Thailand and ChinaAsian central banks are poised for more easing, which will provide “some insulation” from the virus-induced economic slowdownInvestors seeking hedges are better off selling expensive equities than buying “rich” TreasuriesRise in 10-year Treasury yields will likely be capped at around 2.25% this year amid global demand for positive-yielding debt(Adds yield forecast in last bullet)To contact the reporter on this story: Ruth Carson in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Tan Hwee Ann at email@example.com, Liau Y-Sing, Nicholas ReynoldsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The lesson for investors backing higher Treasury yields this week was clear: A good growth story is no match for the virus-related fears gripping the market.It will be tough for the U.S. economy to serve up numbers much stronger in the coming days than what investors just saw. Yields did climb more than 15 basis points from the week’s lows on surprisingly healthy manufacturing and services data, but the move had lost stamina by the time of Friday’s robust payrolls report. The world’s borrowing benchmark rate is stuck around 1.6% and probably tilted lower barring assurances from health authorities that the deadly coronavirus is under control.While inflation dominates the coming week’s economic news, Treasury investors probably aren’t going to worry about any pickup in price pressures until the Federal Reserve does. And testimony from Chairman Jerome Powell is unlikely to signal any change in the central bank’s patient stance -- he’s far more likely to highlight rising global risks.“It’s clear there’s a downward bias in yields, and until we have some scare in inflation I think that stays,” said David Kelly, chief global strategist at J.P. Morgan Asset Management. “The coronavirus may dampen global commodity prices, so if anything it takes a little wind out of the sails of inflation.”As for data that may dent Treasuries in the coming week, retail sales and consumer sentiment are forecast to show the foundations of the record U.S. expansion remain intact. And while a heavy freight of supply might normally pressure yields higher, Priya Misra at TD Securities reckons the current appetite for government securities can easily absorb the combined $84 billion of 3-, 10- and 30-year debt ahead next week.Cap on YieldsMisra, global head of rates strategy at TD, says that until the Fed shifts to a more hawkish stance, the 10-year yield is capped at 1.7%, leaving it more room to fall than to rise.Equities markets may bring more suspense, as indexes near all-time highs could be vulnerable to disappointments in the coming crop of earnings, Misra says.“I look at profit margins and they’re declining -- if we get an earnings scare, I think this story unravels,” she said.The apparently blithe mood in stocks -- at least until Friday’s declines -- may be more consistent with the strength in Treasuries than it seems, if it’s based on the assumption of Fed support, in Misra’s view. That would also gel with the rates market’s pricing for more than a full rate cut as soon as September. The Federal Reserve Board said this week that the outbreak presented a “new risk” to the economic outlook for the U.S.“The reason equities can do well is the Fed has essentially told us if things are bad they’ve got our back, and if things are good they’ll let it run,” Misra said. “I think we’re pricing in this Fed put.”What to WatchTraders will also be watching the results from Tuesday’s New Hampshire Democratic primary for the latest read on which candidate is ascendantThe New York Fed will release new schedules on Feb. 13 for Treasury purchases and repo operationsHere’s the economic calendar:Feb. 11: NFIB small business optimism; JOLTS job openingsFeb. 12: MBA mortgage applications; monthly budget statementFeb. 13: Consumer price index; jobless claims; real average earnings; Bloomberg consumer comfortFeb. 14: Import/export prices; retail sales; industrial production; capacity utilization; Bloomberg U.S. economic survey; business inventories; University of Michigan sentimentFed speakers are everywhere, and the chairman’s on Capitol Hill:Feb. 10: Governor Michelle Bowman; San Francisco Fed’s Mary Daly; Philadelphia Fed’s Patrick HarkerFeb. 11: Daly; Powell addresses the House Financial Services Panel; Vice Chairman Randal Quarles; St. Louis Fed’s James Bullard; Minneapolis Fed’s Neel KashkariFeb. 12: Harker; Powell before Senate Banking PanelFeb. 13: Senate panel holds hearing for Fed nominees Judy Shelton, Christopher Waller; New York Fed’s John WilliamsFeb. 14: Cleveland Fed’s Loretta MesterThe first coupon sales for the quarter are on the way:Feb. 10: $45 billion of 13-week bills; $39 billion of 26-week billsFeb. 11: $30 billion 56-day cash management bills; $38 billion of 3-year notesFeb. 12: $27 billion of 10-year notesFeb. 13: 4-, 8-week bills; $19 billion of 30-year bonds\--With assistance from Alexandra Harris.To contact the reporter on this story: Emily Barrett in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Mark Tannenbaum, Nick BakerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Sylvie Demers named Financial Personality of the Year in the Top 25 ranking of Quebec's financial sector
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. India’s central bank resorted to unconventional policy tools again, as it shored up efforts to bring borrowing costs down and boost demand in an economy on course for its weakest expansion since 2009.The Reserve Bank of India offered to inject as much as $14 billion cash through one- and three-year funding operations, akin to the long-term repos put in place by the European Central Bank. It also relaxed bad-loan norms for some small borrowers and eased reserve requirements for select lending on Thursday, while keeping the benchmark interest rate at a decade-low of 5.15% following a recent spike in inflation.“It has to be kept in mind that the central bank has several instruments at its command that it can deploy to address the challenges the Indian economy faces in terms of sluggishness in growth momentum,” Reserve Bank of India Governor Shaktikanta Das told reporters in Mumbai.The injection of more durable and long-term cash comes weeks after the RBI announced its own version of “Operation Twist” -- where it is buying long-dated government securities and selling short-term bonds. That has helped in better transmission of the central bank’s 135 basis points of rate cuts last year, Das said.The six-member Monetary Policy Committee also kept the door open for further monetary policy easing, by retaining its accommodative stance.“Das has done a Draghi again,” Arvind Chari, head of fixed income at Quantum Advisors Pvt Ltd. in Mumbai, told BloombergQuint, referring to the European Central Bank’s long-term repo operations that started in 2014. He has in the past likened Das’s comment on sticking to an easing bias for “as long as it is necessary” to the “whatever it takes” sentiment spelled by Mario Draghi, the former head of the ECB.Going BeyondIn December, Das resorted to ‘Operation Twist’ with the aim of keep borrowing costs in check after a shock spike in inflation forced the MPC to pause on rate cuts. With inflation now at 7.35%, the central bank’s ability to use the regular rate instrument to lower borrowing costs has diminished.While the MPC said it “recognizes that there is policy space available for future action,” the outlook for inflation is “highly uncertain at this juncture.”High inflation has already pushed India’s real rates -- adjusted for inflation -- deep into negative territory, making it less attractive to investors chasing high-yielding assets in emerging markets.“The RBI is keen to experiment with a wider toolkit, especially as its hands are tied in the short term, given the spike in inflation,” said Mitul Kotecha, senior EM strategist at TD Securities in Singapore. “The use of unconventional measures such as LTRO offers a way to try to enhance the monetary transmission mechanism and fine-tune policy, lowering shorter term yields, without having to cut rates.”The bond markets cheered the move, with yields on the two-year notes dropping by 18 basis points to 5.82% and that of the 3-year notes declining by a similar margin. Yield on the benchmark 10-year bonds was down by 5 basis points.Mild RecoveryThat drop in bond yields should translate into lower borrowing costs and help underpin the green shoots emerging in the economy.Growth in the year starting April is expected to rebound to 6% from an estimated 5% in the current fiscal year, according to the RBI. That matches the lower end of the government’s 6%-6.5% forecast and comes amid early signs of a growth turnaround in the economy.What Bloomberg’s Economists Say:“Looking ahead, we expect the RBI to keep its accommodative hold at its next review in April. Beyond that, inflation is likely to ease back into the 2-6% target range, which would open up room for a rate cut in June.”\-- Abhishek Gupta, India economistTo read more, click hereThe RBI flagged downside risks to growth from the coronavirus, saying the pandemic may “impact tourist arrivals and global trade.” That comes at a bad time for India where recent high-frequency data show that the manufacturing and services sectors are rebounding after a slump. A global slowdown could impact exports which have been rather sluggish.Central banks across Southeast Asia signaled strong policy action this week to counter a hit to their economies from the viral outbreak. The Bank of Thailand cut its benchmark interest rate to a record-low, while the Philippines also lowered borrowing costs. Singapore signaled there was room for the currency to ease and Bank Indonesia Governor Perry Warjiyo said the central bank will keep policy accommodative this year.(Updates with economist’s comments below the 13th paragraph)To contact the reporters on this story: Anirban Nag in Mumbai at firstname.lastname@example.org;Kartik Goyal in Mumbai at email@example.comTo contact the editors responsible for this story: Nasreen Seria at firstname.lastname@example.org, Karthikeyan Sundaram, Jeanette RodriguesFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
TD Asset Management Inc. expands alternative investments lineup with the TD Greystone Global Real Estate Fund L.P.
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.The pound is caught in a tug-of-war between a run of improving economic data and fears that the terms of its future relations with the European Union will damage the country’s prospects next year.Attempted rallies in the pound so far this year have stuttered on concerns the central bank will be forced to stimulate the economy. Just as those worries ebbed, fraught Brexit headlines pushed it right back down. The pattern may last, with a deadline at the end of 2020 to agree a trading relationship with the EU hanging over sentiment.The currency was buoyed Wednesday by better-than-expected services data and improving global risk sentiment, only to fall back on news that European authorities are hatching an offensive to weaken the City of London.“It now looks clear that both the EU and U.K. are starting to take off their gloves,” said Ned Rumpeltin, the European head of currency strategy at Toronto-Dominion Bank. “Our bottom line for sterling is that it is likely to remain mostly a barometer of these risks.”The pound hovered below $1.30 Wednesday, near the lowest level this year, compared to a consensus call for a climb to $1.35 by end-2020. Nonetheless, some analyst remain bullish on sterling. HSBC Holdings Plc’s forecast for it is at $1.45, in a turnaround given the bank has been bearish on the currency in recent years. It expects a “co-operative” solution between the U.K. and EU.“It’s ultra cheap and we don’t see why it should be that cheap,” said HSBC’s global head of foreign-exchange strategy David Bloom on Bloomberg TV. “If you’re looking for the big alternative to the dollar and you think things aren’t great out there, we’ve found something that is cheap and the markets dislike it for all the wrong reasons.”The pound was down 0.3% at $1.2988 as of 3:45 p.m. London time. That’s a fall of around 2% for 2020.The currency is still less volatile than peers such as the Norwegian krone and Australian dollar, which have been driven more by the coronavirus outbreak. Bets on sterling swings are near the lowest since 2014, after being more on par with emerging markets in 2019.If a lack of progress in Brexit talks does turn economic sentiment downward, at least one investor will stand to benefit, having bought 40,000 short-sterling options this week that will pay off if the central bank slashes interest rates 50 basis points by June.\--With assistance from James Hirai and Michael Hunter.To contact the reporters on this story: Greg Ritchie in London at email@example.com;Anooja Debnath in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Dana El Baltaji at email@example.com, Neil Chatterjee, William ShawFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Singapore’s central bank said there’s room within its exchange-rate band to accommodate some weakness in the currency to counter the coronavirus outbreak. The local dollar slid to a four-month low as traders boosted bets for an easing.The currency, which is maintained in a band against a basket of peers, has been fluctuating near the upper end of its boundary since October and could track lower, the Monetary Authority of Singapore said in a statement Wednesday. It maintained its policy outlook and said it’ll meet in April, as scheduled.The assessment from MAS comes as traders are ratcheting up bets for Asian central banks to loosen policy to contend with the spread of a virus that has claimed almost 500 lives in China. Singapore’s trade-reliant economy could prove to be especially vulnerable if the disease disrupts supply chains and saps demand for everything from travel to commodities and investment.“The hit to the economy, both from tourism and supply-chain impact from China, has obviously opened the door to easing,” said Mitul Kotecha, senior EM strategist at TD Securities in Singapore. The Singapore dollar “has reacted negatively, extending its recent decline, and will likely remain under pressure as markets increasingly price in easing.”The Singapore dollar dropped as much as 0.9% to S$1.3824 against the greenback, the lowest since Oct. 10. It was the worst-performing currency in Asia on Wednesday.“There is sufficient room within the policy band to accommodate an easing of the Singapore Dollar Nominal Effective Exchange Rate (S$NEER) in line with the weakening of economic conditions” due to the virus outbreak, the MAS said in a statement.A Central Bank With No Key Rate? Yes, in Singapore: QuickTakeEven before the outbreak spread, the city state was already planning measures to prop up an economy reeling from the effects of the U.S.-China trade war. The disease has added to worries about the outlook, with 24 confirmed cases to date.The government expects gross domestic product to expand 0.5%-2.5% this year after growing 0.7% in 2019. Finance Minister Heng Swee Keat is expected to deliver a supportive budget on Feb. 18.Under PressureAt its last review in October, the MAS eased policy for the first time since 2016 and signaled it was ready to make further adjustments amid rising risks to the growth outlook.The central bank guides the local dollar against a basket of currencies, adjusting the pace of appreciation or depreciation by changing the slope, width and center of a currency band.It doesn’t disclose details on the basket and how it works. Australia & New Zealand Banking Group Ltd. estimates the most heavily weighted are the U.S. dollar, ringgit, yuan, euro and yen.The yuan’s movements will be a focal point for Singapore dollar investors, with China’s currency expected to come under more pressure from the virus-induced fallout, according to S&P Global Ratings.“The more the dollar-RMB pushes above 7, the more people will think the MAS is going to do something,” said Shaun Roache, Asia-Pacific chief economist at S&P. But for now, it’s “communicating to the market that there’s already a little bit of ability for the exchange rate to absorb some of the shock without a policy change today.”(Adds S&P comments in last two paragraphs)To contact the reporters on this story: Michelle Jamrisko in Singapore at firstname.lastname@example.org;Ruth Carson in Singapore at email@example.comTo contact the editors responsible for this story: Tan Hwee Ann at firstname.lastname@example.org, ;Nasreen Seria at email@example.com, Liau Y-SingFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Add record corporate debt to Canada’s list of worrisome borrowing trends, according to Toronto-Dominion Bank.Corporate debt outside the financial sector reached a record 118.7% of gross domestic product at the end of the second quarter, TD economists James Orlando and Brett Saldarelli said in a note Monday. That’s the third-highest among G-20 countries after China and France, according to the report, which cited data from the Bank of International Settlements.Servicing that debt, including interest and principal payments, amounts to 56.6% of income -- close to the record levels seen in 2017 and well above the average for the 2010-2019 period, which was at around 50%, according to the note. While cash levels have risen considerably over the past few years to help cushion that borrowing, debt has grown at an even quicker pace, TD said.“This adds another layer of risk to an already credit constrained Canadian economy,” the economists said. “In the event of an economic downturn, corporate indebtedness could result in widening corporate bond spreads and increased delinquency rates, which would amplify the severity of a downturn.”Debt ServiceCompanies aren’t the only ones carrying big debt burdens. Consumers owe C$1.76 for every C$1 of disposable income and spend a record 15% to service their debt, thanks in large part to an era of low interest rates and a years-long housing boom.TD said real estate, manufacturing, and the oil and gas sectors account for about 45% of total non-financial corporate debt. When adjusting for the level of cash holdings, debt levels in these industries remain elevated and are well above their respective averages over the current economic cycle, they said.With a limited market for non-investment grade issues in Canada, firms are increasingly turning to the U.S. dollar market which now makes up about 60% of the issues, compared with 40% in 2007, TD said, citing Bank of Canada figures. As well, the value of U.S. leverage loans held by Canadian firms increased more than two-fold to $175 billion, of which about one-third is covenant-lite, the said.To contact the reporter on this story: Esteban Duarte in Toronto at firstname.lastname@example.orgTo contact the editors responsible for this story: Nikolaj Gammeltoft at email@example.com, Jacqueline Thorpe, Carlos CaminadaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Global commodities trade is being thrown into chaos by China’s coronavirus crisis, as the top user of raw materials receives the worst demand shock since the 2008 financial crisis.The flow of almost every major commodity is at risk: China’s oil demand has plunged 20% and refineries are curbing operations, liquefied-natural-gas buyers may have to stop taking some deliveries, coal mines are staying shut, copper smelters are mulling output cuts, and crop shipments are stuck at ports.There’s already evidence of havoc across the commodities world. A major Chinese refiner wants to offload West African crude cargoes it no longer needs, while demand for Latin American oil has stalled. Australia will quarantine ships and Indonesia plans to stop food imports. Miners Anglo American Plc and Rio Tinto Group have restricted travel, and OPEC is considering an emergency meeting.The outbreak has dragged down raw material prices as well, with U.S. West Texas Intermediate crude on Monday dropping below $50 a barrel for the first time in more than a year. Industrial metals and agricultural commodities also declined.“This could impact the entire global supply chain,” said Bart Melek, head of global commodity strategy at TD Bank in Toronto. “There are limitations in air transport already. In China, logistics are challenging and there are measures being taken. For some industries that means goods produced in China may not arrive to the United States.”The disruptions show the far-reaching impact of the deadly virus, which spread over the Lunar New Year holiday and has dampened the outlook for growth in the world’s second-biggest economy. While industrial activity typically slows during the break, the epidemic is delaying the resumption of operations. Additionally, gasoline and jet-fuel demand has been hurt by travel cuts.Russian President Vladimir Putin and Saudi King Salman bin Abdulaziz discussed the global energy market Monday as oil markets tumbled, the latest signal that the OPEC+ producer alliance is trying to build a consensus for an output cut to prop up prices. While the kingdom has been pushing for action since last week, it has met resistance from Russia.Meanwhile, Chinese officials are said to be hoping the U.S. will agree to some flexibility on pledges in their phase-one trade deal, as Beijing tries to contain a health crisis.Chinese commodity prices collapsed on the first day of trading after the Lunar New Year break on Monday, as investors returned to markets gripped by fear over the impact the coronavirus. The country’s three major raw-material exchanges were hit by a wave of selling as Chinese traders got their first opportunity to catch up with losses inflicted on overseas markets while they had been on holiday.Metals, energy and agriculture futures were all hammered, with iron ore, crude, copper and palm oil contracts all sinking by their daily allowable limit within seconds of markets opening. Shares in commodity producers also tumbled as stock markets resumed trading.Commodities have been clobbered around the world, from copper in London to palm oil in Kuala Lumpur over fears about the economic fallout from the virus. More than a dozen Chinese provinces have announced an extension of the new year holiday by more than a week in a bid to halt the spread of the virus, which has killed hundreds of people and sickened thousands.(Updates with details about Saudi-Russia call and OPEC+ action in seventh paragraph.)\--With assistance from Alfred Cang, Javier Blas, Sharon Cho, Stephen Stapczynski, Winnie Zhu, Anuradha Raghu, Yoga Rusmana, Dan Murtaugh, Ben Sharples, Jing Yang, Sarah Chen and Bill Lehane.To contact the reporters on this story: Pratish Narayanan in New York at firstname.lastname@example.org;Maria Elena Vizcaino in New York at email@example.comTo contact the editors responsible for this story: Lynn Doan at firstname.lastname@example.org, Pratish Narayanan, Joe CarrollFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.The pound headed for the biggest slump in seven weeks as clashing statements from the U.K. and the European Union fueled fears that talks between the two sides on a future trade deal will be fraught.Sterling fell more than 1% to lead losses among Group-of-10 currencies, wiping out last week’s advance. EU chief negotiator Michel Barnier said in Brussels that a “highly ambitious” trade deal is on offer for the U.K. -- but only if London agrees to its rules. Speaking minutes later, Prime Minister Boris Johnson rejected the demand and insisted Britain will thrive even if negotiations fail.The pound’s drop marks a turnaround from the U.K.’s formal exit of the EU on Friday, when the currency completed its best week since mid-December after the Bank of England kept interest rates unchanged Thursday. While Britain is now in a transitional phase without rule changes, it could still be heading for an economically messy divorce if a trade agreement can’t be reached by the end of 2020.“The tough talk from both sides has thrown quite a bit of cold water onto the post-election Boris bounce,” said Ned Rumpeltin, European head of foreign-exchange strategy at Toronto-Dominion Bank in London. “Now that Brexit is officially behind us, we think markets need to re-calibrate their expectations for a rather bumpy road ahead.”Change in FortunesThe pound rallied toward the end of 2019 on expectations that Johnson would win December’s election and break the U.K.’s political deadlock. The euphoria has since faded and traders are now watching for whether Britain will seek an extension to the transition period before the deadline to do so in June.The U.K. currency fell 1.5% to $1.3015 by 3:55 p.m. in London, after gaining 1% last week. It weakened 1.1% to 84.93 pence per euro. Much of the loss came before Johnson took to the podium, suggesting traders had already positioned in advance.“Today’s losses are probably accentuated by the fact that the pound had rallied so far after the BOE meeting,” said Jane Foley, head of foreign-exchange strategy at Rabobank in London. “That said, we suspect that cable will likely be trading below 1.30 in the weeks ahead on concerns about the tone of the talks.”Still, concerns over Brexit talks are just one part of the equation for pound traders.Sterling’s slide on Monday also reflects the fact that the support it enjoyed in recent days from month-end flows is no longer there. In addition, the currency’s long-term technical charts showed bearish signals on Friday, while global markets overall are trading with a risk-off bias on concern about the economic impact of the coronavirus.Indeed, steady options pricing suggests there is currently too much noise in the pound’s spot levels.The challenges the U.K. and the EU face in striking a trade deal this year aren’t exactly news to traders. Nonetheless, short-term positioning remains sensitive to headlines that suggest the two sides are in for a clash -- especially after Friday’s move which came amid sizable month-end flows that pressured the dollar versus most major peers.Add to that the chart signals that may have spurred momentum investors to chase the market lower, and sterling’s defensive start to the week may be largely explained.The pound-dollar pair formed a bearish candle pattern on the monthly chart, the so-called hanging man, which is an early indication of a waning bullish bias. The currency has entered mean-reversion mode on the daily chart and looks to form a bearish engulfing line pattern on Monday, suggesting further downside risks. For options traders, however, this is all mostly spot noise. Front-end implied volatility is trading near recent lows, while bets for outsized moves over the next week remain subdued.Risk reversals, which show whether traders prefer to own bullish exposure or not, remain steady. Six-month risk reversals, that cover the June deadline for extending the transition period, are near the least bearish sentiment for the pound in two years, as the market still sees a no-trade Brexit as a tail risk.NOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice(Updates pricing.)\--With assistance from Neil Chatterjee.To contact the reporters on this story: William Shaw in London at email@example.com;Vassilis Karamanis in Athens at firstname.lastname@example.orgTo contact the editors responsible for this story: Dana El Baltaji at email@example.com, Anil Varma, Michael HunterFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Treasury Secretary Steven Mnuchin’s debt managers are poised to detail how they will integrate the revived 20-year note into their arsenal for funding U.S. deficits forecast to top $1 trillion each year over the next decade.The government’s refunding announcement Wednesday is expected to show that quarterly long-term debt sales will remain at a record high from February to April. The suspense this week lies in how soon the Treasury will begin selling 20-year notes, and whether it will re-allocate any sales from other coupon-bearing debt to make room for the new maturity.Dealers expect 20-year bond sales -- which were put on ice in 1986 -- to start in May rather than this month. But the Treasury may provide details this week on the issuance’s structure for the first time since it unveiled the plan in mid-January. The new maturity comes as the government is trying to lock in low rates and find more options to fund itself.The deficit has grown under President Donald Trump, mostly because of his tax cuts and higher outlays, even as he had promised to eliminate it. It could swell even further as well if Democrats win the Oval Office in November, as leading candidates are pitching voters with spending plans that would add billions more.“Treasury is looking down the barrel of increasing deficits for a very long period of time,” said Gennadiy Goldberg, senior U.S. rates strategist at TD Securities. “And as we get closer to the presidential election, there isn’t anyone preaching any sort of fiscally conservative views. So Treasury needs spare capacity to borrow more going forward and is trying to figure out where they can catch additional pockets of demand.”In the fiscal year that ended in September, the government posted a $984 billion shortfall -- its most since 2012 -- and the Congressional Budget Office’s latest projections have the gap breaching the $1 trillion mark in 2020 and remaining there at least through 2030.Dealer forecasts are coalescing around the Treasury keeping auction sizes of three-, 10- and 30-year debt unchanged at a total of $84 billion in sales scheduled Feb. 11-13. Among those surveyed, all expect 20-year debt to be sold starting in May.The Treasury is also likely to make clear it’s continuing to work toward adding floating-rate debt linked to the Secured Overnight Financing Rate in coming quarters. SOFR is the Fed’s preferred candidate to supplant Libor as a benchmark for dollar rates. Most firms expect Treasury officials to also share their views on whether bill supply is becoming scarce amid the Fed’s purchases aimed at addressing funding issues in the money markets.Coupon CutsWhere Wall Street dealers’ views are mixed is whether the Treasury will reduce auction sizes of other tenors in May to accommodate the new maturity.Most agree that the department will hold off on reducing other coupon offerings, even though it’s well funded at the moment, as the fiscal shortfall will start creeping up again in the fiscal year that begins in October. That’s when the Treasury will also start facing a wall of maturing debt, forcing officials to lift overall sales to avoid a drop in net issuance.“Seeing the contour of how financing needs will evolve over the next few years, if Treasury cut sales of some other maturities they’d just have to eventually raise them again,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “Given Treasury’s aim to be regular and predictable, they don’t really like to quickly reverse themselves. And there’s a pretty big funding gap that opens up in fiscal 2021 and 2022.”Strategists at JPMorgan Chase & Co., Societe Generale, Credit Suisse and BMO Capital Markets are among those predicting cuts to other maturities to make room for the 20-year sale. That’s in part because the Treasury might want to avoid cutting bills, which some say are already becoming scarce due to the Fed’s purchases, or having its cash buffer rise too much -- both likely outcomes if there are no cuts in coupon offerings.Mnuchin told Bloomberg News last month the Treasury is weighing letting the cash balance increase for “risk-management purposes.” TD’s Goldberg expects that to be the case -- and that’s partly why he doesn’t foresee any coupon-cuts ahead. Treasury’s cash balance reached $450.5 billion on Jan. 29, the most since 2008, and was at $445.9 billion as of Jan. 30.Rising CostUse of debt financing is increasingly in vogue by those touting modern monetary theory. An adviser to Bernie Sanders’ presidential campaign says that the U.S. government could easily pump half a trillion dollars of extra deficit spending into the economy each year without risking a jump in inflation.“The accumulation of this debt has to be serviced and that’s why Treasury is scrambling to take advantage, where they can, of achieving savings on the interest payments,” said Bill Hoagland, a former Senate Budget Republican staff director who’s now a senior vice president at the Bipartisan Policy Center.The annual interest expense on Treasury debt has risen in each of the last four fiscal years, topping $574 billion in the most recent. CBO predicts net interest cost on all of the government’s debt will more than double over the decade. Interest costs are increasing due to the growing debt pile, even as the average yield it pays has fallen.That’s why some investors still expect the government to revisit the idea to issue ultralong debt beyond 30-years, even though Mnuchin told Bloomberg News that this plan is on hold for now.“I wouldn’t be surprised if they started dropping hints again about issuing longer term debt,” said Nick Maroutsos, global bonds co-head at Janus Henderson Group Plc. “Locking in rates at low levels makes sense.”\--With assistance from Sophie Caronello.To contact the reporters on this story: Liz Capo McCormick in New York at firstname.lastname@example.org;Saleha Mohsin in Washington at email@example.comTo contact the editors responsible for this story: Benjamin Purvis at firstname.lastname@example.org, ;Margaret Collins at email@example.com, Jenny Paris, Scott LanmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Sterling traders are sounding confident on the currency’s prospects as they head into one of the most uncertain U.K. interest-rate decisions in years.Thursday’s policy announcement from the Bank of England has tempted investors to sell the currency on speculation of easing. They have also been positioning for an advance over the coming month if the BOE resists calls for action -- or even if it signals a ‘one-and-done’ 25 basis-point reduction. The only factor that could catch them out may be if the BOE hints at further easing and sounds an alarm on the economy.“Should the BOE cut rates this time, as we expect, some indicators in the options markets and on investor positioning suggest sterling’s retreat would likely remain relatively contained,” UniCredit SpA strategists including Roberto Mialich wrote in a note. The Italian bank sees the pound falling to between $1.2950 and $1.3000 in the event of a reduction.Bets on a rate cut have whipsawed in recent weeks and the pound has fluctuated on dovish comments from policy makers and conflicting data about the wider health of the economy. On Wednesday money markets were pricing in an over 40% chance of a rate cut. This was lower than the 70% chance just a couple of weeks ago.“Pricing in of the probability of rate cut in January subsided from the highs following some tentative signs in forward-looking data,” said Agne Stengeryte, fixed income strategist at BNP Paribas SA, adding that “today it is profit taking.”Overnight pound volatility picked up to its highest level since December. The pound slipped for a fifth day on Wednesday to near $1.30 and was on track for its worst month against the dollar since July.Yet a gauge of market positioning, one-month risk reversals, is hovering near its most bullish sentiment on the pound since October. For some analysts the big picture remains positive, and with sterling facing pressure there’s room for a shift upward.Stuttgart-based Landesbank Baden-Wuerttemberg is both one of the most accurate pound forecasters in recent months and a notable bull. They forecast the currency strengthening nearly 12% to $1.45 at year-end.“We think the BOE will stay on hold throughout 2020, maybe even increasing rates toward the end of the year,” senior economist Dirk Chlench said by phone, citing economic performance improving and increased political certainty.Fade Rallies The pound was the second-best Group-of-10 performer against the dollar in 2019, as it rallied toward the end of the year on confidence that the Conservatives would win the December election and help end the U.K.’s political stalemate.Still, some say any further gains will be limited.If the BOE holds rates on Thursday “we might get a little bit of a relief rally in sterling which would just provide better levels to sell against,” said Jeremy Stretch, the head of G-10 currency research at Canadian Imperial Bank of Commerce. “If we see a bounce up to the $1.3150-60 area that will be a good point to fade.”Even if the BOE does ease policy the pound could strengthen. Toronto-Dominion Bank sees the BOE lowering rates twice in the first half of 2020, yet believe they will support U.K. growth, boosting sterling by nearly 8% to $1.40 by year-end.“We would need to see a significant escalation of virus concerns or a clear validation that a follow-up rate cut was in the near-term pipeline for support around $1.2825 to face a meaningful challenge,” Ned Rumpeltin, European head of foreign exchange strategy at Toronto-Dominion, wrote in a client note.(Updates BOE pricing in fourth paragraph, adds comment in fifth paragraph)\--With assistance from James Hirai.To contact the reporters on this story: Greg Ritchie in London at firstname.lastname@example.org;Anooja Debnath in London at email@example.comTo contact the editors responsible for this story: Dana El Baltaji at firstname.lastname@example.org, William Shaw, Neil ChatterjeeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.