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Author profile

Anthony Doyle

Years in the bond markets: 11

Specialist subjects: Economics and interest rates

Likes: Rugby, steak and red wine, country music

Heroes: David Campese, Banjo Paterson, Johnny Cash

A quick look at possible implications of China’s record weakening of the renminbi

The People’s Bank of China (PBoC) has announced this morning that it is improving the pricing mechanism of the daily fixing rate of the renminbi. It will do this by referencing the previous day’s closing rate and by taking into account “demand and supply conditions in the foreign exchange markets” as well as exchange rate movements of other major currencies. As a result, the USDCNY (US dollar t…

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2015-08 us blog1

As economists predict a Fed rate hike, can we learn anything from the 2013 “Fed Fake”?

Thirty-five out of forty-one economists surveyed by Bloomberg currently expect the FOMC to hike the Fed Funds rate on September 17, thereby starting a period of policy normalisation. Most have pointed towards the July FOMC statement which noted better data on net in June and suggested some progress toward the conditions for lift-off. Those economists forecasting a rate hike will tell you that t…

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The Euro, confidence and consumption will drive European GDP

It has been difficult to filter through the noise of the Greece situation these past few months. But when you stop and have a look at the economic backdrop, things don’t look as bad as some of the alarming headlines might have you believe. Some significant economic headwinds have turned into tailwinds, which will likely drive European growth for the next 18 months.

1. The Euro

In April, the E…

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M&G Panoramic Outlook: Jim Leaviss’ views for the second half of 2015

Deflation. Liquidity. Greece. These are the words of 2015 if you are a bond investor. The year started off with a bang, or rather a break, when the Swiss National Bank (SNB) announced the surprise abandonment of the peg with the euro. This was only a mere week before the European Central Bank (ECB) embarked upon an historic quantitative easing programme. Deflation took hold in Europe, governmen…

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The M&G YouGov Inflation Expectations Survey – Q2 2015

A wide range of household decisions – like whether to buy a house, take out a car loan or ask for a pay rise – are affected by expectations about future inflation. Central bankers believe that by closely monitoring inflation expectations they can deepen their understanding about the economic behaviour of consumers. Surveys like the M&G YouGov Inflation Expectations Survey are extremely interest…

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The downside of bonds

Government bond yields are extremely low across the globe. The highly unusual phenomenon of negative bond yields – even on debt issued by countries that still face a debt crisis – is now commonplace. In addition, investors are looking to protect themselves from the carnage in bond markets we have seen in recent weeks  (for example, the “risk-free” German 2.5% 2046 bond is down -19% since the hi…

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Tweet inflation survey March 15

The M&G YouGov Inflation Expectations Survey – Q1 2015

Economic policy hawks love inflation expectation surveys. As do bond fund managers, who like to keep a close eye on inflation to ensure that fixed income returns aren’t being eroded away. Provided that inflation expectations are close to target, we tend to argue expectations are well anchored and thus central bankers can rest easy. However, the monetary policy actions undertaken by many central…

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2015-03 blog

Falling consumer and oil prices may not provide the boost to growth many are expecting

The spectre of deflation currently haunts central bankers around the world, though many of us would question whether the true effects of falling prices are being felt in the real economy and more importantly in consumers’ wallets.

According to the results of the M&G YouGov Inflation Expectations Survey over the past two years, European consumers often believe that inflation in one and five year…

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The greater the income share of the rich, the lower the savings rate

If you want to generate economic growth then encourage the rich to spend

In 1714, an Englishman called Bernard Mandeville published his poem entitled “The Fable of the Bees: or Private Vices, Public Benefits”. The satire was about a hive of prosperous bees that were living a life of luxury. One day, some of the bees began to grumble that their lifestyle lacked virtue and the bees subsequently turn away from greed and extravagance. This leads to a rapid loss of prosp…

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2015-01AD blog

Europe needs a German fiscal stimulus package but won’t get it

The German government can theoretically borrow at negative yields if it were to issue short maturity debt today. Longer maturity debt is also yielding a record low amount. Could the collapse in yields be a blessing for Germany and Europe? Two economists at the International Monetary Fund (IMF) seem to think so. Indeed, the German government’s narrow-minded pursuit of the “black zero” (a balance…

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