The Covid-19 crisis has been a very different recession in a number of ways. One that I think is particularly interesting is the role of banks. While it is a vast oversimplification, ask ten people what caused the great financial crisis, and nine will answer “the banks!”.
This time round, it has been the commercial banks that have helped many economies to remain functioning. Nowhere is that… Read the article
It’s that time of year again. US elections? No – something even scarier. This Halloween, we’ve found no shortage of spooky charts. Here are our top seven, showing some of the most frightening spectres lurking below the surface of financial markets… don’t read them before bedtime.
One of the scariest aspects this year is the huge disconnect between asset prices and macro fundamental… Read the article
The 2020 recession is a direct result of global government policy aimed at protecting populations from the virus outbreak. This has curtailed global growth dramatically, though in a very different way to previous recessions. In this blog we will explore the continuing implications of this and look forward to 2021.
This time is different
This recession is primarily a service-led … Read the article
Energy transition pathways — the move from fossil fuel-based to zero-carbon energy — involve long time-horizons and are highly uncertain, with divergent outcomes based on assumed scenarios. The Coronavirus pandemic dented oil demand and has potentially brought forward peak global demand, if it hasn’t happened already. Against that backdrop, European International Oil Companies (IOCs) have over… Read the article
Egypt has just entered the green bond market, pricing a debut $750 million five-year issue. The bonds join a small but growing asset class of emerging market sovereign green bonds. Since Poland issued a green bond in 2016, there’s been growing green emerging sovereign issuance including by Fiji, Nigeria, Indonesia, Hungary and Chile. These have been joined by broader social, sustainable and pa… Read the article
The coronavirus crisis is having a profound and lasting effect on the global economy, with the vast majority of countries expected to get back to their 2019 level of economic output only in 2022. The consequences of the crisis are not just limited to the economy and to changes in human behaviour. In many countries of the CEE/CIS region, the crisis has coincided with election cycles and will le… Read the article
Last week saw the first ever issuance of a Sustainability-Linked Bond (SLB) from an emerging market issuer. Brazilian pulp & paper producer Suzano issued US$750 million of Jan-2031 bonds at a yield of 3.95%. The bond coupon (3.75%) is subject to a sustainability performance target and shall increase by 25bps per annum from July 2026, if the issuer does not meet its target in 2025. It is differ… Read the article
The EU’s €750 billion recovery fund can be considered a major political achievement for the bloc. It’s good news for investors too, as the announcement helps to contain EU break-up risk as a result of Covid-19.
The plan has also received a positive reaction from green investors: the recovery fund can direct resources not only to hard-hit sectors, but also to sectors not directly affected by… Read the article
When Ken Ofori-Att – the Ghanaian finance minister – presented mid-year budget revisions, he highlighted the huge challenges of the pandemic. The Ghanaian response to COVID-19 has been quick, well organised and aimed at stopping economic weakness becoming a depression. But the rescue is coming at a large financial cost to the country. The fiscal deficit is forecast to be around 11% of GDP in 2… Read the article
One common theme in market commentary of late has been the unprecedented use of the word unprecedented! One thing that used to be unprecedented and is now commonplace is central banks buying corporate bonds. Now this seems to have become conventional monetary policy, it is worth asking “why?” and “is this appropriate?”.
We first wrote about corporate bond purchases in 2009. Bac… Read the article