“Events, dear boy, events”, UK Prime Minister Harold Macmillan responded to a journalist when asked what is most likely to blow governments off course.
At the beginning of this year, Donald Trump was favourite to follow in the footsteps of the previous three Presidents and win re-election. However, events have since unfolded that put his re-election into serious doubt.
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Wowsers, the U.S. labour market never ceases to amaze bond investors. After the cataclysmic April U.S. employment report—nonfarm payrolls (NFP) had dropped by 20.7 million and the unemployment rate had shot up to 14.7%—there was broad agreement amongst market observers that May would prove to be another challenging month. In a Bloomberg survey of 78 economists, the most bullish forecast was a … Read the article
This month will see a significant step forward in the evolution of ESG (environmental, social and governance factors) as a part of fixed income investing, with the launch of the iTraxx MSCI ESG Screened Europe CDS (credit default swap) index. The past few years have seen a noticeable acceleration in investors’ ESG awareness, driven to varying extents by social conscience and evidence that ESG … Read the article
We are currently in the throes of the sharpest and largest economic downturn the modern global economy has ever seen. However, as I wrote in March this is very different from previous recessions.
To recap, a recession has three stages:
Stage 1: into recession
A rapid, record collapse in economic growth as normal economic life is dramatically curtailed for public health re… Read the article
It’s been a wild ride in May for Italian government bonds, so-called Buoni del Tesoro Poliannuali (BTPs). The yield spread of 10-year BTPs over 10yr German Bunds first rose to c. 250 basis points (bps) after the German Constitutional Court had ruled that the ECB’s Public Sector Purchase Programme (PSPP) was partly unconstitutional. Subsequently, the Italian risk premium collapsed to c. 190 bps… Read the article
Summer has arrived, and so should the main tourist season in Europe in a normal year. However, as we know, this year has been anything but normal. With lockdown endings in sight across the majority of countries in the region, most are preparing to welcome tourists back. Some have already opened their borders for EU visitors, while many prepare to open them for everyone from late June or early … Read the article