Monthly Archives:

August 2018

Panoramic Weekly: Keep calm and ‘gradually’ hike

After a turbulent start to the month, the second half of August has turned out to be a much calmer period for financial markets. While geopolitical tensions have not gone away, investor sentiment is currently being well-supported by the favourable economic outlook in the US, coupled with the prospect of a continued period of low interest rates. Global equity and credit markets produced further …

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Turkish banks: this time it’s different?

Guest contributor – Elsa Dargent (M&G Financials Credit Research team)

Turkish banks have been subject to closer scrutiny over the past weeks as political events have triggered a confidence crisis with a run on the Lira (down by 38% year-to-date vs the dollar and by 26% since end-June, the banks’ last reporting date), a sizeable widening in Turkish govt yields, and an even sharper widening in b…

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Panoramic Weekly – Trump’s dollar: making European bonds great again

Most global Fixed Income asset classes rose over the past five trading days, led by recently-battered Southern European government bonds, which rallied on the back of gloomy news: the Eurozone’s trade surplus fell in June to its lowest level in 18 months as export growth didn’t keep up with rising imports. European sales abroad suffered from a rising euro, or a low US dollar – a position favour…

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HY spreads: the story behind the story

There is much talk about how tight US High Yield (HY) spreads are, especially relative to their Investment Grade (IG) peers. The difference between the two, of 241 basis points (bps), is less than half of what it was a decade ago – making some market observers quickly conclude that US HY looks expensive, so investors should favour IG bonds instead. But, is this the full story?

I believe there i…

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BVTV: EM Corporate debt – indiscriminate sell-off?

Emerging Markets have been battered so far this year, hit by the protracted trade wars, a rising US dollar and the uncertainty in Europe following the Italian election. However, and after sell-off, have values reached attractive levels, especially in the corporate space? Watch some insights from M&G fund manager Charles de Quinsonas. And don’t miss Charles’ blog: EM High Yield: is there value a…

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EM HY - US HY spread

Emerging Market High Yield: is there value after the sell-off?

The ongoing financial meltdown in Turkey, increasing risks of more US sanctions on Russia and a repricing of China High Yield (HY) bonds – on the back of higher defaults and increased trade war tensions -, have all resulted in a significant widening of Emerging Market (EM) HY corporate credit spreads. Investors are now getting paid 525 basis points (bps) over US Treasuries for investing in EM “…

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Panoramic Weekly: Summer storm

An escalation of diplomatic tensions between the US and Turkey and Russia triggered a global fixed income sell-off that particularly hit Emerging Markets (EMs), and led to a safe-haven rush, with US Treasuries, Swiss and German bonds in heavy demand. The risk-off mode intensified towards the end of last week, when the Turkish lira plunged 18% in two days as a deadline for Turkey to release a US…

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Can Russia stomach new US sanctions?

After the summer break, the US Congress is scheduled to review various bills proposing additional sanctions on Russia. The proposals include additional restrictions on Russian imports and exports to the US, as well as on activities of Russian banks in the country. Under consideration there will also be a ban, for US citizens, to trade any newly-issued Russian sovereign debt with a maturity of m…

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How vulnerable are Emerging Markets to Trade Wars?

Emerging Markets Portfolio Manager Claudia Calich analyses the potential effects of an escalation of the US-China trade tensions on Emerging Markets. Despite the diplomatic rows and all the column inches written, Claudia discusses how popular products such as French wine and cheese will always find their way to the end consumer, no matter how many barriers along the way. Calich also explains wh…

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