The MAS and its peculiar tightening policy

In its latest semi-annual statement, the Monetary Authority of Singapore (MAS) said it would slightly tighten monetary policy by increasing the slope of appreciation of the Singapore dollar Nominal Effective Exchange Rate’s (S$ NEER) policy band. This is the second increase this year, following one in April, and it confirms the broader monetary tightening recently seen in many Asian economies, …

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Panoramic Weekly: Markets, not Fed, go crazy

Global financial markets seemed to regain sanity over the past five trading days as they reverted to the typical negative correlation usually seen between stocks and bonds: investors snapped up traditionally safer government debt as concerns on the effect of rising rates over corporate profits mounted, dragging down leading equity indices. This followed a period in early October in which both e…

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Beware of the debt binge

A decade of low interest rates has given companies, governments and households an excellent opportunity to cheerfully load up debt – until now. As interest rates rise and are projected to continue to do so in most major economies over the next three years, higher interest costs may soon send a stark reminder that there is no such thing as a free lunch.

Highly indebted companies are most at ris…

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BVTV: Investors, the highs and lows of investing

Tobacco and drinks companies used to be considered very stable, almost quiet industries. Industry players sold products that had no substitutes, and investors would not have to be too worried about negative earnings surprises. That picture seems to have changed now, with new products gaining popularity in the tobacco world and the recent legalisation of cannabis in Canada shaking things up in t…

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Panoramic Weekly: Bonds take a bath

The bond sell-off that started last week with the publication of strong US data continued over the past five trading days, even if Friday’s job report came in below expectations and a slew of global data and events only confirmed a worsening momentum: the International Monetary Fund (IMF) cut this year’s world economic growth forecast to 3.7%, down from 3.9%, citing challenges to trade; Italian…

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BVTV: Recession or growth ahead?

Sovereign bond markets sold off last week, following strong US data. However, Friday’s US jobs report showed that hiring cooled down in September more than expected – a point that markets seemed to ignore as Treasuries continued to sell off. Is it a growing US economy that we have ahead? Or should we expect growth to be challenged by higher rates and rising oil prices? Watch M&G’s portfolio man…

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US long rates: is the giant anaconda about to turn?

The long-end of the US Treasury market has often been described as a giant anaconda: it draws little attention as it sleeps most of the time, but the minute it wakes up, everybody around shakes. US 30-year bonds don’t bite, but their moves can be as poisonous as they basically determine millions of mortgage rates, as well as the price that governments and companies around the world pay for debt…

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