Investors have been on a remarkable ride since Trump’s election in November last year. With equity markets up more than 10% and 10-year Treasury yields up more than 50 basis points since the US election, expectations are high that the new President’s promises will accelerate US growth. Volatility is at… Read More »
The yield on the US 2-year bond is now 2% higher than in the German market. By recent historical standards this is very high. It reflects, of course, the markedly different monetary cycles that the two economic blocs are in. The US is in a tightening monetary policy mode, made… Read More »
European companies are expected to remain in reasonably sound financial health going forward. A material widening in credit spreads as result of a potential reduction in central bank purchasing is not, therefore, considered to be that likely. Policy support including the provision of low and negative interest rates and quantitative… Read More »
Chris Iggo -
Inflation is gradually rising and economic data, on the whole, is very positive. Investor focus is on politics but it is important to understand that the Federal Reserve (Fed) needs to raise interest rates through this year. The risk free rate will go up and that will raise questions about… Read More »
Corporate results are well ahead of expectations, in the US (+2.5% surprise) but also in the Eurozone (+17%) and Japan (+20%). We think that in 2017 global earnings can rise more than 10%, driven not only by a larger contribution from commodity sectors (thanks to higher oil and metal prices)… Read More »
2016 saw a number of pivotal moments, including; Brexit, the election of Donald Trump, huge flows of immigrants into Europe, and a surge in extremist political factions. The repercussions of these significant events and themes will affect markets during 2017. Added to which the Italian situation has not stabilised and… Read More »
European government bond yields have risen markedly since the beginning of fall 2016. But “this time, it’s different,” or at least it should be. Indeed, the landscape of the eurozone economy has dramatically changed since the 2010-2012 sovereign debt crisis. German sovereign bond yields rose 25 basis points (bps) between… Read More »
One of the core themes of populism is taking back control of economic relationships for the benefit of “ordinary” people. That can mean changing the balance of trade relationships, withdrawing from supra- and multi-national organisations, dismantling regulation that is seen to benefit the “elite” and potentially using monetary policy for… Read More »
Mark Holman -
Having enjoyed an extended Christmas rally all the way through January and now into the second week of February, there are a few clouds appearing on the horizon that have caused us to take stock and start booking some early profits, while the technical position remains strong and liquidity remains… Read More »
EM corporate bonds are a rare source of income in a low yield world. Emerging market corporate bonds are a beacon for investors struggling to find sufficient income. Not only do they offer the sort of yields that have all but disappeared elsewhere, but they’re underpinned by solid economic fundamentals.… Read More »
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