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Canada’s increasingly divergent rate path

Yields on Canadian sovereign bonds have been dragged higher in recent months, with the yield on the 10-year bond recently reaching 2 year highs. This sell-off appears to reflect the US reflation narrative, rather than the economic fundamentals of the Canadian economy.

The market currently thinks the Bank of Canada will remain on hold throughout 2017, pricing in only one rate hike – a 20 basis …

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Three of our most popular charts

We often use Twitter to share the charts that we think are interesting, but probably don’t warrant the extra analysis of a blog. With this in mind, I’ve had a look to see which charts were most favourited or retweeted by our followers at @bondvigilantes and provided a little more detail than 140 characters can allow.

  1. Fed Loan Officer Survey show US banks have tightened standards for six consec…

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Clouds in the Valley – Dispatches from a tech conference

I was recently in San Francisco for an internet and technology conference. An array of senior tech managers spoke about their firms’ prospects, priorities and where they see opportunities. Twitter’s Jack Dorsey aside, the overwhelming focus of every session I attended over the three days was cloud computing.

Cloud computing is essentially the move away from users buying, owning and maintaining …

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Posted under US

BVTV: A sign of the times – how political risk has become a DM not EM problem

We are kicking off the week with an emerging markets special on BVTV, as I talk all things EM with my equity market colleague Michael Bourke. Tune in to hear us discuss:

  1. What has been driving the positive EM momentum so far this year and what should investors look out for?
  2. Further signs of improving EM fundamentals in 2017
  3. The implications of the shift in political risk away from EM towards DM…

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BV TV: And the Oscar goes to… political risk

We’ve talked before about how important political risk will be in 2017, as French markets have been the latest to discover. Tune in to this week’s edition, where Fund Manager Wolfgang Bauer joins me as we discuss:

  1. What’s the impact of political uncertainty on French OATs?
  2. Is political risk spilling over into the corporate arena: what’s behind the decoupling of European and US credit risk?
  3. Does…

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CPI wHat?

In the UK, as of next month the official measure of consumer prices will become CPIH, with the H standing for housing.  As at today, the only difference between CPI and CPIH is the inclusion of owner-occupied housing in the latter, on a rental equivalence basis (“how much would it cost to rent the home I own?”, a similar measure to the Owners’ Equivalent Rent component of US CPI), which has a w…

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This week on Bond Vigilantes TV

We used to have bear and bull markets, now we have a “chameleon market” to keep us on our toes.

In this week’s edition we will be joined by Richard Woolnough, Fund Manager.

Tune in and listen to our latest thoughts:

  1. Is the Fed already behind the curve?
  2. The never ending saga of the Eurozone…
  3. Special edition: Richard Woolnough’s insight into the credit markets

 

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Five observations about Inflation

1. We are at the point of peak oil pass through: January and February 2016 saw oil prices reach their lows ($34.25 Brent January 20th and $26.21 WTI, February 11th), so this week’s inflation numbers will see some high year-on-year oil price base effects, as will February’s. This is one of the main reasons why we have been seeing significant rises in inflation in recent months.

2. The upward mar…

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