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Markets

Beyond Dividend Cuts – Crisis Implications for Bank Debt Investors

In the last two weeks, both the ECB and the PRA effectively demanded that banks stop paying shareholder dividends and buying back stock for at least six months. The announcements, even though they were leaked in the press well before official confirmation, sent bank share prices plummeting, as investors saw what had been improving income streams in recent years come to an abrupt halt. It also …

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Corona-Crunch: one of the most violent corrections on record

A lot can change in a month. While many of us grapple with the new daily regime of lockdowns, remote working, home schooling and scouring the shops for that last fabled toilet roll, it’s worth taking a moment to review what has happened to credit markets over the past few weeks.

Even in social isolation, one would be hard pressed to miss news headlines reporting the sell off in equities and…

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ECB to the rescue: Whatever it takes 2.0 ahead?

It’s been a rough two weeks in bond markets, to say the very least. Risk-off sentiment is reigning supreme. In Europe, looking at my screens this morning, iTraxx Xover—a bellwether of European high yield credit risk—jumped to its widest level since mid-2013, while the yield on 10yr German Bunds dropped to an all-time low below -0.8%.

In previous times of market turmoil, the European Cen…

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Six scary charts to spook investors this Halloween

Financial markets can be a scary place for investors. The US economy is now in its longest expansion on record, the world is seeing record level of total debt and now even some corporate bonds have negative yields.

If you’ve carved a pumpkin, got your Halloween costume and been to see the latest scary movie, there’s only one thing left to do: take a look at the Bond Vigilantes team’s 2019…

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Beware the widow-maker

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 …

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Panoramic Weekly – Black Friday: Credit goes on sale

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…

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Panoramic Weekly: October pest

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…

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BVTV: 10 years after Lehman, still holding on?

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…

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Risk-off is on

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…

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Panoramic Weekly – Trade war survivors: High Yield, FRNs

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…

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