MARKET MOVES •Last week concerns about the global economy and Fed monetary policy drove market sentiment. •Cut off of gas supplies by Russia introduced further major uncertainty into the outlook and also raised the risk of a potential oil embargo by the EU. •China’s COVID-19 lockdown measures and the ongoing… Read More »
We expect Treasury to announce a final round of nominal auctions size cuts, concentrated at longer maturity sectors, at its May refunding meeting. Our assumption for cuts imply a drop in gross nominal supply from $780bn per quarter to $759bn. We think further supply reductions beyond this refunding quarter are… Read More »
Elon Musk’s proposed takeover of Twitter would cause leverage to spike significantly above the 1.5x downgrade threshold associated with the ‘BB+’ issuer credit rating. The proposed transaction includes $13 billion in new debt financing issued by the company and a $12.5 billion margin loan against $62.5 billion of Tesla Inc.… Read More »
We like emerging market (EM) local debt within an overall bond underweight. Much monetary tightening has been done, and valuations are compelling. U.S. Treasury yields hit new three-year highs last week, and equities fell. We still think stocks can weather the yield rise in the inflationary backdrop. U.S. and euro… Read More »
Looking at the current and future scenario, we remain cautious in terms of overall risk taking. Some long-standing trends, such as energy crisis, deglobalization and the need for income redistribution, support a risk of persistently high inflation. The crisis in Ukraine has accelerated certain dynamics, generating a scenario of lower… Read More »
With elevated inflation, slowing growth from the Covid rebound and a historically tight labour market, stagflation concerns remain high among investors. And, with the Fed embarking on one of the steepest hiking cycles since the 1990s, there are also growing concerns over recession risk. To gauge the market-implied probability of… Read More »
• Flows into global ETPs in March rose above February’s inflows, with $115.6B added over the course of the month. • Below the surface, trends differed vs. February: equity flows stayed relatively steady with $74.8B in, slightly down on February’s $76.1B, while fixed income flows rose to $25.5B. • Commodity… Read More »
The Euro, together with the Swedish Krona and the Swiss franc led the G10 rankings last week. The sense that the Russian invasion may be entering a less catastrophic stage certainly helped, as did the pullback in oil prices after Biden announced massive sales of oil from the US strategic reserve… Read More »
The Riksbank’s Executive Board signalled that rates will remain on hold until the second half of 2024, a dovish stance that stands in contrast to the recent trend in global central bank communication and in stark contrast to Sweden’s neighbour, Norway. We see four reasons for a near-term hawkish policy… Read More »
The banking bounce back has continued with HSBC doubling first half pre-tax profits as economies come out of their defensive hiding places, and the spectre of bad debt recedes. Pre-tax profit for the period rose to $10.8bn, compared to $4.32bn for the same time last year. The dividend is back… Read More »
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