UBS deal a cathartic moment for AT1s
UBS came to the market yesterday with a two-tranche $ additional tier 1 transaction, which was highly anticipated and didn’t disappoint.
Insights Topic
TwentyFour
Fed survey points to a slowdown of the US economy
Following yesterday’s publication of the quarterly Senior Loan Officer Opinion Survey (SLOOs) by the Fed, it revealed how lending conditions have evolved over the quarter amongst US banks.
A big week for US treasuries as the Fed holds rates steady
George Curtis breaks down the latest developments following this week’s Quarterly Refunding Announcement and the Treasury Borrowing Advisory Committee update.
Why staying in cash could cost you 10% to 30%
While bonds are once again finding their feet, investors have found themselves sitting on cash balances of 30% to 50%. This capital preservation trade has made perfect sense, but does it still make sense as we reach terminal rates?
Fundamentals show European banks well set up as bonds are still cheap
Whilst bank debt has recovered from the contagion of the US regional banking crisis and the Credit Suisse write down event earlier this year, many bonds are still trading wider than they were at the beginning of the year.
The ECB hiking cycle is likely to be over
Yesterday, market participants received two important reports about the state of the economy in the Eurozone. Firstly, the October Markit PMI – Purchasing Managers’ Index - reports showed a continued deterioration in growth in the manufacturing as well as the services sector.
Hitting the wall: What next for high yield default rates?
Thomas Barkin, President of the Richmond Fed, called any (potential) upcoming recession "the most predicted recession ever".
Today’s labour market numbers are good news for the Bank of England
This morning the ONS published its monthly update on the UK labour market. Of all the G7 countries, the UK has had the most puzzling labour market dynamics post pandemic, as we discussed in a previous blog.
Examined: the case for fixed income in a hard or soft landing
Fixed income investors have gone through a stressful few weeks. Since the beginning of September, government bond yields have moved sharply higher, causing spreads to widen and returns to worsen across the board.
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.