The TwentyFour Blog
Mixed news from the CPI release - but what does it mean for rate cuts?
Yesterday’s US CPI report delivered a few interesting numbers but is still consistent with the Fed’s goals and timelines, which should allow it to cut rates in the context of some sort of a soft landing.
Unemployment in the US: a tale of two surveys
The latest US non-farm payroll numbers increased by 275,000 for February (payroll survey) incorporating a two-month payroll revision of -167,000, most likely due to seasonal factors, leaving a net revision of just 108,000 jobs added.
Powell and Lagarde share notes on possible rate cuts
We have had a busy week on the central bank front with the Federal Reserve chair Jerome Powell’s semi-annual testimony to congress on Wednesday before Christine Lagarde took centre stage at the European Central Bank press conference yesterday.
RT1s in vogue once again as issuance bounces back
NN Group, the Dutch insurer, has issued its inaugural €750m Restricted Tier 1 (RT1) deal, which came with a 6.375% coupon and BBB-/BBB rating from S&P/Fitch.
One year on from the collapse of Credit Suisse - and what a year it has been for AT1s
Almost a year ago to the day, we were in the midst of banking sector turmoil, which started off with regional banks in the US and spilled over to Europe, eventually culminating in the forced merger between Swiss banks UBS and Credit Suisse.
Green waves down under: Australia's journey with sustainable RMBS
Much like the European market, Australian ABS has started 2024 with considerable momentum, with over AU$12bn in issuance year-to-date and a significant pipeline building. But how are its green credentials?
The latest insights on leveraged loans and their impact on CLOs
Last year was a volatile year for global markets but also one where economies performed better than expected. If we look at the leveraged loan market, last year was characterised by a surge in so-called amend and extend (A&E).
The UK’s data rollercoaster: recession confirmed, inflation eases, and consumers rebound
Last week's data deluge from the UK painted a mixed picture for the economy, offering insights into inflation, growth, and the possible path for interest rates.
Shelter component exposes the Fed's ‘last mile’ battle with inflation
The January US consumer price index (CPI) data came in stronger than expected with core month-on-month figures coming in at 0.4 % (0.3% expected) and year-on-year figures at 3.9% (3.7% expected) but unchanged from December’s 3.9% print.
US Credit shows healthy supply and demand dynamics
US corporate bond primary markets have had a robust start to the year as both Investment Grade (IG) and High Yield (HY) companies have looked to take advantage of the recent rally in rates and spreads that we have experienced since Fed Chairman Powell's December FOMC comments up until his more cautious stance in the January meeting.
Next week’s CPI numbers will provide more clues on rate cuts
Next week markets will receive January Consumer Price Index (CPI) inflation prints from the US and the UK, which will no doubt be widely followed. In the US, the Bloomberg consensus is for a significant drop in headline CPI from 3.4% to 2.9%, while core is expected to decline by a less spectacular 20 bps from 3.9% to 3.7%. For the UK, consensus is for a small increase in CPI inflation from 4.0% to 4.1%.
Issuer calls drive AT1 spread compression
A few weeks ago, JP Morgan skipped a call on one of its $1,000 par preference shares (“US Prefs”). The perpetual notes had a coupon of 6.75% payable until Jan’24, with a subsequent reset of 3-month SOFR + 404bps. Post the non-call, the coupon changed to 9.35% and will continue to reset every 3 months.
Blog updates
Stay up to date with our latest blogs and market insights delivered direct to your inbox.
