All insights
Inverted yields curves make short-dated bonds more compelling
It is our view that without a doubt 2022 was a year to forget for the bond market. Whether you held government bonds, high end corporate credit or riskier high yield paper, you would have taken a knock as steep increases in interest rates across the globe sent bond prices tumbling.
Speed is now of the essence in the bond markets
After what can only be described as a relatively dire year for fixed income in 2022, during which spiralling inflation led to one of the most aggressive rate hiking cycles on record, we believe the market for bonds is now looking much healthier.
Dovish talk raises hopes that interest rates have peaked
Since the last Federal Open Market Committee rate decision on September 20, rates markets have sold off very aggressively. And, despite rates being left on hold, the hawkish message, which included the possibility of another hike this year and less cuts next year than previously forecast, was one of the key contributing factors behind the ~55bps increase in the 10-year treasury in the 10 days following that meeting.
What next for US regional banks with rates expected to be higher for longer?
As we commence upon earnings season, we will be paying close attention to another round of updates from the US regional banks, particularly within the context of a “higher-for-longer” rate environment. With wider adoption of a soft-landing view, as well as a higher treasury yield backdrop, we explore what implications this has for the US regional banks.
Sharp move in US treasuries led by talk of a soft landing
The last few weeks has seen a sharp move up in long dated Treasuries, since the week of the FOMC meeting in September the US 10 year has moved up 45bp to 4.75% with a brief flirt with 4.90% in the meantime
That shrinking feeling: Money supply tightens as rate hikes feed through
Following the recent publication of the European Central Bank's monthly “Monetary Developments in the Euro Area” report, Felipe Villarroel takes a deep dive into how this report evidences the impact that successive rate hikes are having on the economy
Pause for thought: Was this the BoE's final rate hike?
Are central banks now at a point where they are done with hiking cycles and are we seeing a positive outcome for fixed income?
Deals come thick and fast in European ABS after summer recess
The European ABS market is making a strong comeback post-summer, witnessing two of the busiest weeks in over a decade, driven by robust demand.
Fed rates held: Goldilocks is in the building
Eoin Walsh shares his thoughts following last night's statement from the Federal Reserve, concluding that for now while treasury yields aren’t helping, credit looks attractive based on the rosy economic forecasts.
ECB: That's All Folks?
Felipe Villarroel argues that it will not be long before we see yields in fixed income assets at levels markedly above spot inflation which could translate in investors racing to lock in those yields.
Growing signs that the UK labour market is weakening
The labour market has been one of the major headaches the Bank of England has had to deal with in their battle against inflation. Yesterday the ONS released their monthly labour market update and although some of those headaches’ causes are not abating, there are others that are actually showing signs of progress.
ECB’s turn to skip?
Dillon Lancaster comments on the divergence in views from ECB members, and whether the end of the week will see a 'skip' or 'hawkish pause'. He believes either outcome is not likely to have a huge effect on the market.