2015-11 blog AR 1

Is there still slack in the US labour market?

We have often blogged about the current tightness in the US labour market; in particular the initial jobless claims number as a percentage of the working age population being at all-time lows.  The Fed too has recently produced indicators to tell a similar tale; looking at unconventional unemployment proxies – such as the insured unemployment rate in this recent post – suggests that labour mark…

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15.11.04 blog CC1

Colombia: At risk of a rating downgrade to BBB-

Part of the ABC of Latin American debt series (see here for views on Argentina and here for Brazil)

During my recent trip to Latin America it was funny (but not surprising) to hear the locals worrying about Colombia becoming the next Brazil. In turn, Brazilians are worried about becoming Argentina (though I believe the Argentinean problems are much more solvable in the near term than Brazil’s) …

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Chicago research trip video: Tight labour markets and crisis-like corporate bond valuations

It has been a while since we last uploaded a video from one of our U.S. research trips. The question we asked in March as to whether the Fed would hike interest rates this year or not has still not been conclusively answered. Although a 2015 hike is not completely off the table, as we are entering the final two months of the year it seems a lot less likely than it did back then. Nonetheless, fr…

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US companies are scared of risk

Happy Halloween. Five scary charts that Freddy Krueger would be proud of.

M&G and bondvigilantes.com proudly present the scariest charts on the global economy. Some will make you laugh, some will make you cry. You will be amazed, you will be enchanted, you will be mystified, you will be amused. Of course, the following is not for the faint of heart. You have been warned.

  1. Companies are scared of risk

There has been a glut of corporate bond issuance since the financ…

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15.10.28 blog RW1

The real data – the Phillips curve is alive and well

One of the first rules of economics is that the equilibrium market price is generated by relative supply and demand. Limited supply or excess demand should result in an increase in price. One of the questions that has arisen in the post financial crisis world is why have wages not increased despite unemployment heading towards historically low levels? Given the improvement in data such as headl…

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2015-10 blog CC Brazil 1

Brazil: caught in a destructive trap between politics and economics

Part of the ABC of Latin American debt series

Brazil currently finds itself caught in a destructive trap between politics and economics.

On the political front, it is impossible to trade the daily noise and headline risk. The possible impeachment (45% probability as a guesstimate) of Rouseff would still be subject to various steps and legal challenges and could take a minimum of 6-9 months. Thr…

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M&G Panoramic Outlook: Quasi-Sovereigns in Emerging Markets, by Charles De Quinsonas

It has been quite an eventful year for emerging markets. The fall in oil and commodity prices, the prospect of higher interest rates in the US, the corruption scandal in Brazil and of course the growth slowdown in China have all contributed to increased uncertainty for the asset class. Naturally this uncertainty has impacted performance, weighing down on returns of both hard and local currency …

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QUASI-SOVEREIGNS IN EMERGING MARKETS

A growing asset class

Emerging market (EM) corporate debt has been the fastest-growing segment of fixed income assets over the past decade, rising by nearly seven times since 2005 with external EM corporate debt currently worth c.US$1.7 trillion – larger than the US high yield credit market. One significant contributor to this growth in EM corporate debt in recent years has been the increasing …

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Is it wrong to invest on space hardware? Will satellites put the ONS out of a job?

Two things last week that made me go “hmmm”.  Firstly: having written a blog on the impact of El Nino on global inflation (here), Anthony was contacted by a company who then came in to see us to discuss their business.  Using data from NASA and EU satellites, they produce earnings estimates for retailers, and forecast economic data.  By counting cars in Big Box parking lots from space, they gen…

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2015-10 blog CC (Argentina) - ENG2

The ABC of Latin American debt: Argentina trip report

I just spent two weeks traveling Latin America around the IMF meetings in Lima. The region is navigating through various shocks: lower commodity prices, deteriorating balance sheets, growth and fiscal deterioration, an urgent need for structural reforms and significant political challenges. There is plenty to write about, so in the next couple of days I will post a series of blogs focused on th…

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