
Can we complain about ABS supply?
The start of the school year ordinarily also marks the end of summer for the primary bond markets as issuance restarts, though this year feels rather different.

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

Fixed income in strong position with Fed cut a done deal
It feels as though market news hasn’t taken a holiday so far this summer. From the US on Wednesday we got the minutes of the Federal Reserve’s (Fed) July 30-31 policy meeting, and revisions to a whole year of non-farm payrolls (NFP) data from the Bureau of Labour Statistics (BLS).

Jackson Hole: 25 or 50?
The title of this year’s Jackson Hole Economic Symposium – essentially a short holiday camp for the world’s economists and central bankers – is “Reassessing the effectiveness and transmission of monetary policy”, an important question given the remarkable resilience developed market economies have shown to the sharpest interest rate hiking cycle we have seen in four decades.

UK data shows economy catching up with Bank of England
When the Bank of England (BoE) cut interest rates for the first time in four years earlier this month, we thought the move – made on a knife-edge 5-4 vote – had come a little too early.

US inflation makes case for (small) September rate cut
Recent US Consumer Price Index (CPI) inflation data brought good news for investors and central banks.

Lower rates a bigger risk for bank equities than for bonds
Market attention in the government bond market has rapidly turned from central banks holding rates “higher for longer” to the potential for “lower and sooner".

ABS performance review - fundamental focus
Headlines have painted a nervous picture of the health of consumers across Europe. Simultaneously, rating agencies have upgraded their outlook on the same consumer assets to neutral. The short story is that, although there has been a mild weakening in performance metrics, the consumer has held up well and is ahead of our base case expectations in almost all areas.

AT1 calls - another one bites the dust
Julius Baer announced a call of its $300m Additional Tier 1 (AT1) instrument. The bond had a coupon of 4.75%, and if not called it would switch to a new coupon of five-year Treasury yield plus 284 basis points (bps), so about 6.7% at the moment.

European banks earnings season - the groundhog day
We are coming towards the end of the reporting cycle for European banks for the first half of 2024. Unlike other quarterly reports, mid-year results are particularly useful in our view. They confirm the trends that we have already seen in the first half of the year, and thus validate or indeed put into question, the outlook that the management teams laid out for the full fiscal year.

A couple of non-recessionary surveys
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.

Labour market dents soft landing sentiment
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.
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