Over my 25 years in bond markets, there’s always been one trade that becomes known as “The Widow-Maker”. Being underweight long-dated gilts was one, at a time when new pension regulations sent yields plummeting, and shorting the Japanese bond market also became deadly as the Bank of Japan slashed rates to zero. Today, widows and widowers are being made in the German bund market. Yields on the …Read the article
November is proving to be even worse than October, especially for Credit markets, amid plunging oil prices, corporate woes, executive scandals and protracted unconvincing economic data, all on top of a global interest rate rising cycle. Corporate bonds, which have been supported by loose monetary policy for over a decade, particularly felt the cold: US Investment Grade (IG) spreads last week po…Read the article
In true market fashion, both stocks and bonds suffered in October, hit by concerns about the effects of rising rates and trade wars on economic growth and corporate profitability. The past month brought evidence of a slowdown, particularly in Europe and Asia: third quarter GDP growth in the Eurozone came in below expectations, dragged down by Italy’s flatness, while in Asia, Industrial Output i…Read the article
Last Saturday marked exactly 10 years since Lehman Brothers went bust. Are we still suffering the consequences of the Global Financial Crisis that followed? Had the crisis not occurred, would we have today’s political uncertainty? Watch M&G fund manager Wolfgang Bauer and Investment Director Ana Gil discuss how the clash between growth and political risk are driving markets today, and what oppo…Watch the video
Renewed political tensions between the US and Turkey and Russia increased uncertainty and led to a currency sell-off in both countries. Traditional safe-haven assets, such as US Treasuries and the yen, rose. Are these crises telling us anything about the state of the global economy?
What is happening and why?
The Turkish lira and the Russian ruble plunged recently, following an escalation of di…Read the article
Despite a battery of central bank meetings, which left things more or less where they were – read: supportive of economic growth – global bond markets suffered from the ongoing trade wars, from rising oil prices and also as US data remained unconvincing, dragging down inflation expectations. Only about one quarter of the 100 fixed income asset classes followed by Panoramic Weekly posted positiv…Read the article
Speculation that Japan, traditionally a bastion of bond market stability, may shift its ultra-loose monetary policy pushed most developed market government yields higher over the past five trading days: higher rates in Japan may reduce demand for global assets as the billions of yen that fled the country’s negative-yielding monetary policy two years ago may now return home. The central bank’s d…Read the article
Traditional fixed income risk assets, such as Emerging Markets (EM) and High Yield (HY), rallied over the past five trading days, shrugging off an escalation of the trade tensions between the US and China. The world’s No. 1 economy announced plans to set tariffs on an additional US$200bn worth of Chinese goods, adding to the $34bn that came into effect on Friday. The almost 200-page list of goo…Read the article
Guest contributor – Tristan Hanson (Fund Manager, M&G Multi-Asset Team)
The flattening of the US yield curve has inspired much commentary and hand-wringing in certain quarters lately. The concern is overdone.
Looking back at perio…Read the article
Today’s US election result has several implications for emerging markets. At a first glance, the outcome is clearly negative, given the potential downside risks from increased trade protectionism, anti-immigration measures, large fiscal expansion and steepening of the US yield curve and uncertainty in terms of foreign policy.
These risks are already being reflected in asset prices. Since the re…Read the article