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President Trump will be good for the transmission mechanism of animal spirits

The world will soon turn to the inauguration of Donald Trump. For at least the next four years, global investment markets will be focusing on his Presidency. This is always the case when a new President takes over the reins of the most economically powerful country in the world, but why does it feel more important this time?

Firstly, political deadlock has been broken. For the first time since …

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This week on Bond Vigilantes TV

Join us on Bond Vigilantes TV, where this week we discuss:

  1. Sterling – how low might it go?
  2. The curious case of rising US dollar and US Treasury yield correlations;
  3. Corporate bond markets and economic uncertainty;
  4. Euro corporate bond issuance – a sign of things to come?

Tune in for our thoughts on the stories making headlines this week.

 

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China Renminbi: the USD $50,000 question

Last week, in line with expectations, China announced the renewal of the $50,000 limit of dollar purchases by individuals. What’s changed however is that the foreign exchange commission (SAFE) has tightened the scrutiny on the foreign exchange purchases. Applicants are now required to detail the purpose behind their transactions in order to ensure that the purchase is for “suitable purposes” (e…

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A wrap up of 2016 bond and currency market performance

Turning back the clock to the first week of 2016, fears of a Chinese slowdown and the Federal Reserve beginning to normalise rates hit stock markets hard. By Valentine’s Day bond yields had fallen to – what was then – all-time lows.  But we hadn’t seen anything yet. Ongoing ECB QE, Brexit, UK QE, novel Japanese monetary policy, president-elect Trump and ECB tapering. In a year of political and …

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This week on Bond Vigilantes TV

Join us on Bond Vigilantes TV, where this week we discuss:
1) 2016 – a quick review
2) recent government bond yield sell-off – was it really that big?
3) Eurozone inflation – back, but for how long?

Tune in for the charts, articles and the Bond Vigilantes team’s thoughts on the stories making the headlines in the bond markets this week.

 

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Emerging market debt: 2016 post-mortem and 2017 outlook

Despite a year of high political turmoil – which of course included the UK EU referendum and the US elections – emerging market assets proved surprisingly resilient to the various global events, even with rising core government yields in the second half of 2016.  Given that starting valuations at the beginning of the year, both with respect to credit spreads as well as currencies, were pricing …

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M&G Bond Vigilantes Christmas Quiz 2016 – the answers and the new champion

Before we get to the main event, I’d like to thank everybody who has made a donation to Cancer Research UK as a result of our 10th birthday celebrations.  We are over the £10,000 mark now. We still have one box of our second Bond Vigilantes book left.  If you’d like a copy, send your name and address to us at bondteam@bondvigilantes.co.uk and we will send them out on a first come, first served …

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Japan research trip: how will the Bank of Japan exit YCC?

Guest contributor – Jean-Paul Jaegers, CFA, CQF (Senior Investment Strategist, Prudential Portfolio Management Group)

Recently Jim Leaviss and I travelled to Tokyo to discuss local economic developments and Bank of Japan (BoJ) policy with economists and analysts based in Tokyo.

There was generally broad agreement that the potential path for Japanese government bond yields (JGBs) is asymmetric. …

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