Tag Archives:

US

Defaults in European Retailers and US Energy on the rise

2019 has been a pleasant ride so far for high yield investors. Over the past 9 months the global high yield market has delivered a total return of 10.9% and an excess return of 6.4%, in part thanks to the U-turn of major central banks. Despite all the good news, things have occasionally gone wrong.

Recent events have reminded high yield investors that investing doesn’t come without risk. Thomas…

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Why the fresh US sanctions on Russia are unlikely to cause a meltdown

Late on Friday night, the US announced a fresh round of sanctions against Russia, effective from the 26th August. These restrictions represent the 2nd round of sanctions in line with the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 (CBW Act). The announced sanctions include US opposition to the financial or technical assistance to Russia provided by international…

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High Yield in 2019 – floating or fixed?

As we all know, 2018 turned out to be a tough year for most asset classes, not least High Yield (HY) bonds. The sell-off in the fourth quarter was particularly quick and brutal compared to the recent lulls of benign volatility under the blanket of central bank largesse. Global HY lost a few percentage points in pure local currency terms in 2018, whilst the lower beta and more senior secured hea…

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Panoramic Weekly: Emerging Markets win US mid-terms

Emerging Market (EM) bonds and currencies were one of the main beneficiaries of Tuesday’s US mid-term elections, which resulted in a split Congress, with the Democrats controlling the House of Representatives and the Republicans, the Senate. This may refrain President Trump from implementing further fiscal incentives, which usually fuel the economy, lifting Treasury yields and the US dollar. Th…

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Panoramic Weekly: Bonds take a bath

The bond sell-off that started last week with the publication of strong US data continued over the past five trading days, even if Friday’s job report came in below expectations and a slew of global data and events only confirmed a worsening momentum: the International Monetary Fund (IMF) cut this year’s world economic growth forecast to 3.7%, down from 3.9%, citing challenges to trade; Italian…

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BVTV: Recession or growth ahead?

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…

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US long rates: is the giant anaconda about to turn?

The long-end of the US Treasury market has often been described as a giant anaconda: it draws little attention as it sleeps most of the time, but the minute it wakes up, everybody around shakes. US 30-year bonds don’t bite, but their moves can be as poisonous as they basically determine millions of mortgage rates, as well as the price that governments and companies around the world pay for debt…

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BVTV: What could go right for European banks?

Veronique Chapplow and Ed Booth

Ten years after the collapse of Lehman Brothers, US banks have gone from strength to strength whilst European banks have been losing ground and are trapped with low returns. Ed Booth, banking analyst at M&G’s equities team, talks to Investment Specialist Veronique Chapplow to discuss why US banks have become attractive earnings compounders and why their European …

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US & UK Inflation: Goldilocks and the bear?

After a decade dominated by extraordinary monetary stimulus that has kept interest rates and consumer prices at bay, the dog that didn’t bark is finally showing signs of life: inflation. As seen on the chart, both US and UK wage inflation have spiked in a tightening labour market – an old textbook recipe for further price increases to come. However, one has to look beyond the headlines to depic…

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Panoramic Weekly: Ignoring Trump

Most global fixed income asset classes gained over the past five trading days, despite an escalation of the ongoing US-China trade war and the inclusion of new tariffs between the world’s two largest economies. Reduced trade, however, may bring more harm than good to the US economy, as levies usually generate inflation and, therefore, higher rates. Indeed, the benchmark US 10-year Treasury yiel…

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