Macroeconomics

In our MSB update, a member of the Multi-Sector Bond team reflects on the banking turmoil that occurred in Q2, as well as happenings around the US debt ceiling and global inflation. She then goes on to discuss the ways the MSB team have responded to Q2 events.

What sort of landing will the global economy experience? With the recent release of the US CPI report, inflation has been on a downward trend and the resilient activity data has continued to surprise many. This report has acted as a trigger of sorts for increasing calls for a soft landing.

Following the release of the Monthly Labour Market Overview, Felipe Villarroel highlights key takeaways on the tightness of the UK’s labour market. He assesses the changes to the demand and supply of the labour force - focusing on the ‘Inactivty Rate’, “Long-Term Sick” and “Retired” categories, and migration trends - and what this means for wage inflation.

Felipe Villarroel discusses the observations of the median long run rate and what this means for the neutral rate.

Last week Aza Teeuwen and our ABS team visited the Global ABS conference in Barcelona. One key discussion point in CLOs was around the lack of leveraged loan supply and the resultant sharp slowdown in the primary market

What can we expect from central banks this week? Felipe Villarroel looks at how recent CPI prints in the Eurozone and in the United States are expected to influence upcoming central bank monetary policy decisions.

What have we learnt from the ECB’s Consumer Expectations Survey? Felipe Villarroel discusses how latest changes in the consumer’s expectations of the economy reflect that the ECB’s monetary policy is actually working.

Following higher than expected inflation data in the UK, Gordon Shannon looks at the knock on effects within the Gilt market and the increased pressure on the Bank of England.

Yesterday’s CPI Report from the Fed gave reasons for optimism. Read Felipe Villarroel’s analysis of the report and what it could mean for the Fed’s uncomfortably long battle against inflation.

Following the publication of the Senior Loan Officer Opinion Survey, Felipe Villarroel highlights what caught our attention in the report and if it signals further tightening of financial conditions.

Is the end of rate hikes near for the US? Concerns over regional banks and a weakening labour market are raising questions about the Fed's next move.

TwentyFour AM portfolio manager Jack Daley discusses Q4 performance for Investment Grade markets and provides his outlook for 2023.