Category Archives:

US

President Trump will be good for the transmission mechanism of animal spirits

The world will soon turn to the inauguration of Donald Trump. For at least the next four years, global investment markets will be focusing on his Presidency. This is always the case when a new President takes over the reins of the most economically powerful country in the world, but why does it feel more important this time?

Firstly, political deadlock has been broken. For the first time since …

Read the article

Does the US government bond market sell off mark the return of the bond vigilantes?

The bond market was intimidating during the Clinton years, and has started as it means to go on for Trump’s term.  As we celebrate this website’s 10th anniversary, it proves fitting that the bond market reminds us why we named the blog as we did.

The result of the US election was a surprise given the polls, but the exceptionally short-lived “risk-off” reaction in bond markets has been just as …

Read the article

President-elect Trump. 5 predictions on what happens next in the global economy and markets

The votes are in and it is clear. For the second time in 2016 we have had a major rejection of the political status quo. Following on from the shock UK referendum result, a Trump victory is further evidence that many believe that we have reached peak globalisation and income inequality. The perceived losers of globalisation have turned the incumbent political system on its head, and with it we …

Read the article

The election result impact on US high yield markets and the healthcare sector

As James mentioned this morning the European high yield markets’ response to the Trump election victory has been fairly benign. The U.S. high yield market, as one would expect, has been a bit more pronounced, although not as severe as European equities or S&P futures. The U.S. CDX Index, a CDS index of U.S. high yield issuers much like Europe’s Itraxx Crossover, initially dropped nearly two poi…

Read the article

The US election result impact on high yield markets

After the surprise election result, market reaction within the European high yield market has been surprisingly muted. Here are a few key moves that show how the news is being digested.

In general, the market seems to be pricing in little to no impact for European risk premia, and even for the more potentially directly impacted companies in Latin America, the re-pricing has been very mild.

It …

Read the article

The US election result impact on emerging markets

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

Bond market reaction to Trump’s election victory

As Donald Trump delivers his victory speech, and is set to become America’s 45th President, here’s a quick update on what we’re seeing in bond and currency markets since you went to bed.  For bonds, the impact has so far been relatively modest; it’s been equity markets where moves have been stronger (the Nikkei is down 5%).  Last night the Mexican peso was the barometer of the likely outcome, a…

Read the article
Steepness of the US IG non-financials curve

Good things come to those who wait – a look into valuations of USD long-dated credit

In a recent blog post, Ben discussed relative valuation opportunities in the US investment grade (IG) corporate bond market. Today, the long-dated segment of this market looks increasingly attractive given how steep credit spread curves in the US dollar IG space are at the moment.

The chart below shows the credit spread curve, as of 30th September, of US dollar denominated IG-rated non-financia…

Read the article
Posted under US

Volatility for U.S. hospital bonds ahead

As the rhetoric of the U.S. presidential race heats up over the summer campaigning months, one topic we are likely to hear much on is health care.  Health care in the U.S. is always a highly charged political subject, and now even more so with extra scrutiny on prescription drug prices and continued debates over the Affordable Care Act (ACA) or Obamacare.  Obamacare is deeply unpopular with the…

Read the article

A video from our NY research trip examining the US healthcare sector

It has been a while since we last uploaded a video from one of our U.S. research trips. Richard and I recently travelled to New York to meet with various local analysts and strategists. The timing of the trip could not have been better: the Federal Reserve needs to decide whether and how to continue its rate hiking cycle and event risk in the economy is high. We had the opportunity to discuss a…

Read the article