Archive

BVTV: Trump, Temer … and the I-word

Join me, Laura Frost, on BVTV to discuss the political uncertainty surrounding the Trump presidency and Brazilian leader Michel Temer.

  1. We look at the effect on the bond and currency markets following a period of historically low volatility.
  2. The week saw European bumper issuance following the French election.
  3. And what to look out for this week, including the M&G Chelsea Flower Show.

 

 

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A problem with U.S. average hourly earnings, and why it may be understating the true picture

The last time the US had an unemployment rate below 5% and inflation expectations around 2%, the Fed funds rate was above 5% and had been aggressively hiked in the preceding period. Yellen’s Fed has been happy to let rates stay low amongst a tight and tightening labour market because wage growth has been lower than one would expect for a jobs market as healthy as this one. So, slow growth of wa…

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BVTV: Europe’s turn for positive surprises

The Eurovision song contest may be over for another year, but Europe’s capacity to surprise could well continue. Tune in to the latest edition of BVTV, where Anjulie Rusius joined me to discuss:

  1. European economic surprises on the rise vs a slowing US
  2. Bank of England Super Thursday: Dovish message but attempts at a hawkish tone
  3. How much is the ECB tightening its corporate bond purchase programm…

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Which bonds have benefitted most from the ECB’s corporate bond buying programme?

European investment grade (IG) corporate bond spreads are now more than 40 basis points tighter than in early March 2016, before the European Central Bank (ECB) announced the expansion of its quantitative easing programme into the € IG corporate bond space. The technical tailwind provided by monthly bond purchases to the tune of around €7.5 billion from June onwards under the ECB’s corporate se…

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Emerging market corporate bonds – falling default rates and high yields. Too good to be true?

An improving picture in 2017

With only one issuer defaulting in the first quarter of 2017 (compared to eight in the same period 12 months ago), the emerging market (EM) corporate external bond asset class has until now met expectations that its default rate could be significantly lower in 2017. Improvements in both macro and corporate fundamentals have helped this outcome, providing relief for …

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M&G Panoramic Outlook: Emerging market corporate bonds – falling default rates and high yields. Too good to be true?

There are a lot of misconceptions about defaults in emerging market (EM) debt. Too often, EM corporates are either considered ‘serial defaulters’ compared with their developed market peers, or seen as a single and homogeneous geography. In reality, default rates follow economic cycles, and having a regional, if not country, approach to default risk remains paramount due to different jurisdictio…

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Win 2 members’ tickets for the RHS Chelsea Flower Show sponsored by M&G Investments on Wednesday 24th May. And please donate to Cancer Research UK

I have to be honest here.  Even though we sponsor it, whenever I go to the Chelsea Flower Show I am reminded of bleak Sundays being dragged around garden centres as a child, hoping there is at least a pets section with some rabbits or something in it.  Or some swings.  Nevertheless, many people love flowers and plants.

So, in support of CASCAID, the UK asset management industry’s effort to rais…

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BVTV: Relief rally gets new legs on Macron victory

EU officials are breathing their latest sigh of relief this morning, after French voters opted for centrist candidate Emmanuel Macron over far-right rival Marine Le Pen in yesterday’s second round presidential elections. Markets will now turn their attention to whether the incoming president can assemble a parliamentary majority without the benefit of an established party behind him.

Tune in to…

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The Israeli Shekel: Flying under the radar

Though the recent US Treasury report did not name any country as a currency manipulator (see more details on this in Mario’s blog), the monitoring list centres on larger economies that meet the following criteria:

  1. The country has a significant bilateral trade surplus with the United States defined as more than USD 20 billion.
  2. The country has a current account surplus of at least 3% of GDP and …

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Is a telecom acquisition spree set to kick off in the U.S.?

Last week, the U.S. Federal Communication Commission (FCC) announced the results of the latest $20 billion, 600Mhz spectrum auction. Communication companies were bidding for spectrum over which they provide wireless services to their customers.  The largest bids came from wireless mobile operator, T-Mobile USA, which spent $8 billion, and U.S. satellite TV provider DISH Network, which spent $6….

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