Monthly Archives:

September 2017

German unemployment rate and real GDP growth

Angela Merkel’s Pyrrhic victory

And they say German elections are boring… As the preliminary results are in, here are our three key takeaways.

(1) Merkel goes fourth

First things first, as expected Angela Merkel has won the election. Her CDU, in combination with its Bavarian sister party CSU, is going to remain the largest faction in parliament (33.0% of votes combined). All roads lead to a fourth term for her as chancellor. …

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BVTV: What to watch for as the Fed begins balance sheet reduction

In today’s environment of solid, synchronised economic growth and low volatility, it is easy to believe such conditions are well set to continue. Did you know that we are now in the third longest bull run in the history of financial markets?

This week on BVTV I look back at the run-up to previous market bubbles and discuss what the Fed’s long-awaited balance sheet reduction announcement could m…

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Is it time for the Bank of England to target nominal GDP?

In December 2012, the then Governor of the Bank of Canada, Mark Carney, gave a speech entitled “Guidance” to the CFA Society of Toronto. Less than two weeks earlier, the UK Chancellor of the Exchequer, George Osborne, had announced that Carney would be the 120th Governor of the Bank of England (BoE). As this was Carney’s first public engagement since the announcement, traders and market economi…

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BVTV: Inflation surprises and central bank dilemmas

Ben Lord, corporate bond fund manager and inflation specialist, joined me in the studio this morning, after a week in which we saw both the UK and US CPI prints surprise to the upside. With some central banks ramping up their hawkish rhetoric in recent weeks, what likelihood of rate hikes are markets now pricing in, and what impact is this having on bond markets? Watch BVTV for Ben’s latest thi…

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Mexico: a primer. Elections, inflation, the Bank of Mexico, NAFTA and gasoline

I’m just back from a fascinating research trip to Mexico City, to meet with policymakers, bankers, politicians, analysts, pension funds and regulators.  Like many emerging market economies, the Mexican economy has suffered over the past couple of years due to lower commodity prices and weak global demand for goods.  Of course, Mexico has had its own unique challenge with Donald Trump’s election…

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Typical hurricane paths in the Caribbean

Caribbean bonds: forecasting the weather, tail risks and spreads

First of all, our thoughts are with those impacted by Hurricane Irma and other recent weather-related disasters.

Beyond the human tragedy and economic costs, these are typically low-probability, but potentially high-impact, events that can ultimately impact an issuer’s ability to service its debt obligations. As bond investors, we aim to assess the various risk factors related to the companies …

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UK CPI continues to overshoot the target

CPI now 2.9% up from 2.6% last month, above expectations and overshooting the Bank of England forecast

UK CPI is now within a hair’s breadth of requiring a letter to the Chancellor. RPI increased to 3.9% from 3.6%, which was also above expectations. The increased fuel prices were expected this month, but August is also a high inflation month given transport price hikes that take place as people head away for their holidays, and as clothing and footwear prices are hiked with the new season’s coll…

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BVTV: The ECB, primary markets, and the insurance industry

Dr. Wolfgang Bauer, M&G fund manager, helps manage corporate bond and absolute return portfolios. This week on BVTV I ask him:

  1. What were the key takeaways from the ECB meeting?
  2. Primary market issuance is picking up again, who has been most active in issuing new debt?
  3. How will the insurance sector be impacted by the devastating natural disasters that have hit the U.S. in recent weeks?

Hear Wol…

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The 2nd largest bailout in British history and its economic effects

The Slavery Abolition Act of 1833 formally freed 800,000 Africans who were then the legal property of Britain’s slave owners. What is less well known is that the same act contained a provision for the financial compensation of the owners of those slaves, by the British taxpayer, for the loss of their “property”. The compensation commission was the government body established to evaluate the cla…

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