Goldilocks, one of investors’ favourite economic scenarios, seems to have returned in the new year after almost vanishing in 2018: a strong US jobs report and dovish comments from US Federal Reserve (Fed) chair Jerome Powell have reinstated the not-too-hot, not-too-cold environment that combines relatively low rates and good-enough economic growth – supporting risk assets. US High Yield spreads…Read the article
Spanish government bonds have outperformed their European peers so far this year. How has the country changed from being near a European Union bail-out only a few years ago to its present, more solid state? Watch M&G Investment Director Ana Gil explain it.
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Prices of most global corporate bonds rose over the past five trading days, as above-expectations US economic data fuelled the dollar, took US equities to new heights, and the International Monetary Fund (IMF) confirmed its US growth prospects while cutting those for the Eurozone, Britain and Japan. The risk-on optimism left behind Emerging Markets (EM) sovereign debt, hit by the protracted US-…Read the article
I was in Tokyo last week, seeing a mix of economists, JGB experts and clients. I was also awesome at karaoke, dressed as an astronaut.
The last time I was in Japan, over a year ago, I came away thinking there was a decent chance that the Bank of Japan would abandon its zero interest rate policy (ZIRP) as it was damaging banks’ profits, and sending a negative signal to Japanese households and b…Watch the video
The Financial Times today ran a story that the ONS has admitted errors in its measurement of the telecoms sector. It seems that the ONS has effectively been focussed on output of the telecom sector as based on turnover of the providers, and making a price assumption of the goods and services they sell. On this methodology, the ONS shows prices of telecoms were flat between 2010 and 2015, and tu…Read the article
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…Read the article
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…Read the article
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…Read the article
In the UK, as of next month the official measure of consumer prices will become CPIH, with the H standing for housing. As at today, the only difference between CPI and CPIH is the inclusion of owner-occupied housing in the latter, on a rental equivalence basis (“how much would it cost to rent the home I own?”, a similar measure to the Owners’ Equivalent Rent component of US CPI), which has a w…Read the article
1. We are at the point of peak oil pass through: January and February 2016 saw oil prices reach their lows ($34.25 Brent January 20th and $26.21 WTI, February 11th), so this week’s inflation numbers will see some high year-on-year oil price base effects, as will February’s. This is one of the main reasons why we have been seeing significant rises in inflation in recent months.
2. The upward mar…Read the article