After a significant policy error at the end of last year, Argentina has once again found itself in trouble – and back in the headlines – in recent months, suffering from dented credibility and a fast depreciating peso. This morning on BVTV, I look at whether current levels now offer a buying opportunity.
Also this morning: what’s behind EM FX market weakness, and is it actually a US dollar sto… Watch the video
With the notable exception of the upcoming royal wedding, it would be pretty difficult to find a topic that is currently more over-analysed than the flattening of the US Treasury yield curve. On this blog as well we have pondered potential implications for credit valuations and possible counter-measures the Fed might employ. Still, one aspect that has arguably not received enough attention in t… Read the article
Having lagged the broader market somewhat last year, US banks are expected to see revenue gains in 2018 as interest rates continue their rise. By contrast, the picture in Europe is less rosy, and earnings catalysts remain hard to find.
Stephanie Betts, an investment specialist in M&G’s equities team, joined me this morning to discuss prospects for bond and equity investors. Tune in to hear us d… Read the article
If you looked at the post-referendum changes in sterling versus the dollar, or the movement in gilts, you’d be forgiven for thinking that Brexit was done and dusted. The 10 year gilt yield has bounced back to around pre-referendum levels hovering around the 1.4% mark (in August 2016, 10 year gilts rallied to historical lows of 0.5%), while the front end of the yield curve has moved higher. Simi… Read the article
Argentinian assets have been under material pressure in recent days. I thought it would be useful to write my thoughts on the recent moves and implications for markets going forward.
Over the past two months, the Argentinian peso had become overvalued in real terms following large inflows from foreign investors in 2017. These capital flows caused the nominal exchange rate to depreciate by much… Read the article
The Bank of England’s (BoE) Term Funding Scheme (TFS) came to an end earlier this year. As a brief recap, the scheme offered four year funding at the BoE Base Rate plus a fee to the banks and in turn, the banks were required to lend into the real economy (the fee was dependent upon the net lending of the bank). We previously wrote about the scheme here and here.
The borrowing scheme has been hu… Read the article
Persistent structural weaknesses, imbalances, and financial fragilities. These were some of the ways in which the International Monetary Fund (IMF) described the Italian economy in its most recent country report. Almost a decade after the great financial crisis, Italy’s economic prospects remain dim, with the costs borne disproportionately by the working age and younger population. With no gove… Read the article
After a stellar 2017, eurozone economic data releases have disappointed recently. Stefan Isaacs joined me this morning to discuss the region’s prospects, focusing on the key learnings from the latest ECB meeting, why the US Treasury sell-off has so far failed to have a material impact on European rates, and implications for credit markets. Watch the video
The flattening of the yield curve is carefully watched by investors as it is traditionally a good indicator of an economic slowdown. However, we always need to question conventional wisdom, and one thing we can say about the great financial crisis, and the great financial recovery, is that the actions central banks have taken to meet their mandates has been quite different this time.
The Fed ha… Read the article
Jim recently updated an old chart from 2007 showing the relationship between a flattening yield curve and credit spread levels. Back then, this classic leading indicator of recessions correctly predicted a big sell-off in corporate bonds. The rest, as they say, is history.
More than 10 years later, Jim joined me this morning on BVTV to discuss if recent US flattening means we really could be he… Watch the video