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US yield curve flattening: nothing to see here

Guest contributor – Tristan Hanson (Fund Manager, M&G Multi-Asset Team)

The following blog was first posted on M&G’s Multi-Asset Team Blog, www.episodeblog.com. M&G’s Equities Team also regularly post their views at www.equitiesforum.com.

The flattening of the US yield curve has inspired much commentary and hand-wringing in certain quarters lately. The concern is overdone.

Looking back at perio…

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One year, one hundred climbs. Thanks everyone. CASCAID is well on its way to raising £2 million for Cancer Research UK.

I did it! On 12th November I rode up the 100th and final hill of my challenge, Cheddar Gorge in Somerset.

 

The UK asset management industry has now raised nearly £2 million over the course of this year through CASCAID.  All this money will be going directly to Cancer Research UK.  The target was £1 million, so a huge thanks to all those who have donated to the huge variety of different events…

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Beware the death of Libor

Guest contributor – David Covey (Financial Institutions Analyst, M&G Fixed Income Team)

The end is coming for the London interbank offered rate (Libor).  Ten years after suspicions emerged that this key interest rate was being manipulated in the financial crisis, regulators are ramping up their efforts to replace the benchmark rates. The Bank of England (BoE) and US Federal Reserve are leading …

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BVTV: Middle Eastern tensions and rising oil

Saudi Arabia, Yemen, Lebanon. The political risk spotlight has swung largely away from North Korea in recent days – despite President Trump’s visit to the region – and towards the Middle East. Fears of a wider regional confrontation have grown after an anti-corruption drive by Saudi Arabia’s young heir apparent, the firing of a missile from Yemen at Riyadh that the Saudis have blamed on Iran an…

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In a QE adjusted world, bond indices look very different

Investing in public securities, whether equity or debt, is driven by two primary desires; firstly a need to save for the future, and secondly the requirement to see these savings grow. This results in a need for investors to pursue low risk and high growth investments.  In order to understand these risks, assets get categorised based on their potential and historic risk characteristics. Broadly…

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BVTV: What a week that was. Powell, US tax reforms, and BoE hike

There was no shortage of topics up for consideration for today’s BVTV: Jerome Powell’s nomination as next Fed chair, further clarity around President Trump’s much touted US tax reform plans, and the UK’s first interest rate rise for 10 years.

With Powell’s nomination very much perceived as preserving the US monetary policy status quo, it’s the latter two developments that I have focused on this…

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Here are some of the scariest charts in finance to celebrate Halloween

Investment markets have been remarkably resilient over the course of 2017. Sure, the geopolitical environment has thrown up a few frightening days which saw markets sell-off but on the whole volatility has been muted and most asset classes have generated solid total returns. That said, any horror movie fan will tell you that the scariest part of a horror film happens when things are relatively …

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BVTV: And you thought Halloween was scary. Risks, rates and Brexit.

This week on BVTV I am joined by Helen Thomas from blondemoney.co.uk. Helen thinks that the market is underestimating the scenarios around Brexit, and believes that a reversal of Brexit should be on investors’ radars. With many expecting a continuation of the current goldilocks environment (low inflation, solid growth) into 2018, and the Bank of England in-play this week, could an unforeseen de…

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European Central Banks: it’s not just the ECB meeting on Thursday

While the market gears up for the much anticipated European Central Bank meeting on Thursday, there are two other European central banks due to meet earlier in the day; Sweden and Norway.

I was in Washington a couple of weeks ago for the World Bank and IMF conferences, which was a great opportunity to hear from policy makers and economists. It served as a timely reminder that the European centr…

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The hunt for emerging market yield is killing covenants

Would you buy a 7-year unsecured bond at 6% yield from a B1/B+ rated Brazilian airline (first time issuer) with well-below-standard credit covenant protection for investors? Many did last week. Few would have a year ago.

This year, many emerging market bond investors have been tempted to lend further down the credit spectrum in search for higher yields. Strong inflows into the asset class combi…

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