NEWS TICKER September 20th: Portugal's debt agency, Instituto de Gestao da Credito Publico (IGCP) is re-opening a 6-month March 23rd, 2018 T-bill and issue new 12-month Sep 21st, 2018 T-bill for an indicative amount of between €1.5bn to €1.75bn today. Demand should be buoyant. At the last 6-month T-bill auction on July 19th this year, IGCP allotted €500m at an average yield -0.292% and ended up being covered 2.77 times. At the re-opening of the Jul 20th, 2018 T-bill on Aug 16th, IGCP allotted €750m at an average yield -0.291% and bid-to-cover of 2.45 times – Norway’ sovereign wealth fund reports that it has touched a record $1trn in assets as of yesterday -The Fed’s FOMC policy announcement today (expected around 18.00 GMT) is colouring global markets today. The committee will also release its latest economic projections; while Fed chair Janet Yellen’s commentary is expected about half an hour or so later – In other US market news today, look out for NAR home sales data and the Department of Energy’s latest report on weekly crude oil stocks -- Can Theresa May begin to salvage Brexit this week? Donald Tusk, president of the European Council, says he will meet with UK Prime Minister in London next week to discuss Brexit. Negotiations between the EU and UK have stalled with little progress made in recent weeks. Meantime local press reports have it that at her upcoming speech in Florence she will lay out an initial offer to contribute to the EC to secure access to the single market for a transitionary period. Will both initiatives reinject some life into the clearly stalled talks? -- Meantime corporate results news today is broadly positive despite some questions over UK consumer demand. “Kingfisher’s half year results released to the market today showed revenues rising by 4.5% to just over £6bn, with a good portion of this rise attributed to currency movements. Stripping out those currency effects, investors should note that the numbers do not look as good, with sales falling by 1.3% and underlying pre-tax profits rising by just 0.9% to £440m, reports the Share Centre. “General performance in the UK was mainly good, driven mostly by the success of Screwfix. However, this was more than offset by the continuing weakness in France where sales fell by 4.6% on a like for like basis. Overall sales were also disrupted by continuing operational changes the management is taking. This includes integration of its various brand’s operations under one IT system and one supply purchase system. Whilst some of the financial benefits are already showing through, the restructuring was expected to hit sales and interested investors should acknowledge that management is working on minimizing this effect over the longer term. This performance is not too much of a surprise to the market but interestingly, the shares were up by around 8% in early trading. Likely down to management reiterating that they expect to meet consensus underlying eps targets, despite still flagging caution for the second half of the year. They also announced a £60m share buyback which would have contributed to this morning’s share price rise.” Nonetheless, the analytics group says that it retains a cautious attitude to the retail environment as consumers in the UK are increasingly felling the pressure in real incomes. Moreover, the generally more upbeat tone in Europe isn’t feeding through to the group’s French businesses – The European Banking Authority is inviting comments on rules governing asset securitisation. The EU banking regulator is looking into concerns that some parts of its securitisation rules may make it more difficult for banks to shift nonperforming loans off balance sheets -- Having been strong in the previous week and then seen a slow session on Monday, Northern and Central European sovereign spreads traded wider yesterday, according to VTB’s Capital Bond Morning commentary today. Long and belly Russian benchmarks increased 6bps-8bps in yield, while the front end was more balanced, rising only 2bps-4bps. The bank also noted profit-taking in Ukrainian bonds, with the sovereign curve shifting up 10-12bp in the long end and 6bps-7bps in shorter durations. Kazakhstan moved up 3-4bp in all tenors. In Azerbaijan, AZERBJ 24 (YTM 4.28%) underperformed, going 5bsp higher, yield-wise. Armenia was the sole name in the sovereign space which was resilient to the weaker risk appetite, closing intact yesterday. Meanwhile, the Russian Ministry of Finance is to announce the results of the bonds swap today – Commenting on continued low market volatility in a client note this morning, Arne Staal, head of multi-asset quantitative strategies, at Standard Life Investments says, “The low volatility regime reflects an unusually ‘volatility-accommodative’ macro and corporate environment. A lack of major surprises in financial and economic data has allowed markets to price in benign economic growth expectations. Some gradual normalisation of volatility in the direction of average long-term levels is likely (in the absence of catalysts for a more abrupt increase in risk). For volatility to rise more structurally, we need to see developments that alter the expected path of the global economy. Some of the known macro risk catalysts that could lead to an abrupt transition to a high volatility regime include the risk of major government or central bank policy errors in the US, China or Europe, or geopolitical events, such as the possibility of military conflict in North Korea. In addition, valuations in many asset classes seem stretched by standard measures.” --