Sovereign bond markets sold off last week, following strong US data. However, Friday’s US jobs report showed that hiring cooled down in September more than expected – a point that markets seemed to ignore as Treasuries continued to sell off. Is it a growing US economy that we have ahead? Or should we expect growth to be challenged by higher rates and rising oil prices? Watch M&G’s portfolio man…Watch the video
Guest contributor – Jean-Paul Jaegers CFA (Senior Investment Strategist, Prudential Portfolio Management Group)
Getting a sense of when recessions are about to happen is a near impossible task, as evidenced by official institutions that often fail to forecast recessions, and organisations like the NBER (National Bureau of Economic Research) that specialises in dating US business cycles, dating …Read the article
Brazil has been facing the perfect storm since the re-election of Dilma Rousseff in October 2014 and asset prices in Latin America’s largest country have collapsed. Credit default swaps on Brazil 5-year sovereign debt in US dollar and hard-currency corporate bond spreads widened to as much as 545 bps and 938 bps respectively, as at the end of September 2015, which is higher than during the 2008…Read the article
Knowing how poor the central banks have been at forecasting economic indicators, and having analysed the IMF’s wild forecasts, we think that it makes sense to take consensus views with a large grain of salt. However, there is a substantial body of empirical evidence that has emerged since the 1980s that suggests that the bond market is a pretty good predictor of real economic activity.
It has b…Read the article
When it was all academic, I enjoyed reading about the causes of the Wall Street Crash, the Great Depression and the German hyper-inflation. Policy errors abounded. The UK going back on to the Gold Standard in the middle of the crisis and sending the economy down in to a deflationary spiral. Andrew Mellon, US Treasury Secretary, saying “liquidate labor, liquidate stocks, liquidate farmers, liq…Read the article
Think the US is out of the woods now that congress has come to an agreement on the debt ceiling? Not according to this chart from Rich Yamarone, an economist at Bloomberg. It’s called the “2 percent rule”. When US GDP falls below 2%, it usually means the world’s largest economy is headed for a recession.
Last week, we received confirmation that US GDP was just 1.6% in Q2 2011. Combined with ye…Read the article
Hi everyone, I’m the new guy on board. I started at M&G last week but the rest of the team is already working really hard to find me a ridiculous nickname.
Yesterday morning, I saw a familiar face in the news. My macroeconomics professor at LSE, Christopher Pissarides, had just won the Nobel Prize in economic sciences (jointly with Dale Mortensen and Peter Diamond). On top of being an exception…Read the article
Dear Bond Vigilantes,
The small nation of Ireland has received more than its fair share of press since the credit crunch started three years ago. The financial crisis has not been kind to the Irish economy, with the collapse of the Irish property bubble having a profound impact on citizen’s net wealth and psyche. In fact, Ireland was the first country in the EU to officially enter recession. As…Read the article
Now that the new UK government is bedding in and getting ready to unleash austerity upon us, I thought I’d quickly look back at the last Labour government and tell you something that you won’t want to hear: the last Chancellor Alistair Darling did a very good job.
There were three significant tests given to him during his 3 year Chancellorship. Of those, I think that two were passed with flyin…Read the article
With sovereign and political issues taking centre stage in markets recently, macroeconomic indicators have taken a back-seat in many market participants’ minds. But how have the advanced economies been recovering, absent these risks? Today I’d like to focus on some research on labour markets that was recently published by the International Monetary Fund (IMF) in their World Economic Outlook and…Read the article