Fixed Income

Uncertainty is over, it was a 50 basis points (bps) move. As we mentioned in our previous blog, the most important take away from the Federal Open Market Committee (FOMC) meeting would be their assessment of the economy.

We have consistently highlighted the benefits of higher interest rates for the European banking sector. However, the current outlook suggests that lower rates are anticipated going forward.

While the majority of headlines have concerned whether the Fed will do 25bp or 50bp to kick off its cutting cycle, we think this is only one part of the discussion – and not necessarily the most important one.

In his headlining speech at the Jackson Hole Economic Symposium, Federal Reserve (Fed) chair Jerome Powell’s message to the market was clear.

Recent US Consumer Price Index (CPI) inflation data brought good news for investors and central banks.

With US economic data driving very large moves in the last few days, we think it is worth highlighting two data releases that were published yesterday. The Institute of Supply Management (ISM) Services and the Senior Loan Officer Survey spoke of an economy that is stronger than some of the recent price action might suggest.

If you were on vacation last week, your holiday blues wouldn’t have been helped when you looked at your screens this morning, given how quickly sentiment has changed, mainly on the back of one data point.

Positioning and fixed income markets have remained quite tricky this year, however credit markets have continued to perform very strongly. TwentyFour Asset Management's Eoin Walsh, discusses why he thinks there is opportunity within European credit despite the rate headwinds and pull back on some of the aggressive rate cutting expectations markets had at the start of the year.

TwentyFour Asset Management's Chris Bowie discusses the underweight duration across all of our outcome driven strategies, how this phase is now coming to an end, and why we are beginning to increase our interest rate duration in all of our funds.

Last week, the Bank of England (BoE) published a speech by its Executive Director for Markets, Victoria Saporta, in which she laid out the central bank’s evolving role as a lender to the UK banking system. More specifically, the speech highlighted how the BoE expects to see UK banks having a greater reliance on its funding facilities going forward.

Excess savings have been at the centre of heated debates among economists and market participants ever since the pandemic.

The last few weeks have seen former President Donald Trump establish a lead over current President Joe Biden across polls in the run-up to November’s US election. Even though it is early days and a lot can change before November (including the Democrat candidate), it is worth considering what a second Trump term might mean for the world economy and for fixed income markets.