TwentyFour

In what has been a busy week for macro news in Europe, the latest round of data for the Eurozone delivered a surprise that could have implications for the European Central Bank’s (ECB) interest rate plans.

With the first Labour budget since 2010 dominating headlines, hallway conversations and family gatherings in the UK for the past couple of months, the stakes were very high indeed for the chancellor, Rachel Reeves, on Wednesday. Political opinions aside, the budget is usually an important event for market participants and this one was no exception.

With elevated yields and inflation expected to come back to target, we think investors can target a level of real return that was extremely difficult to achieve in the previous cycle.

Despite higher interest rates and cost of living increases across jurisdictions, there is no sign as yet of any impact on issuance levels in European consumer ABS.

A lot has happened since our last blog about the state of affairs in the European High Yield (HY) market. At the time, the sector had just seen three of the largest capital structures of Altice France, Ardagh Group and Intrum AB announce restructuring advisors in quick succession, with growing fears that it would represent the start of a wider default trend.

George Curtis (Portfolio Management), from our Multi-Sector Bond team provided a comprehensive understanding of the key aspects of yield curves.

In this inaugural edition of Flash Fixed Income, we look at the highly unpredictable US presidential election and explain why a potential second Trump administration could limit the Federal Reserve’s ability to deliver more rate cuts.

Over the last few months in the Additional Tier 1 (AT1) market we have seen a growing trend of issuers “pre-funding” their transactions even earlier. In some cases, such as Belgium’s KBC and Austria’s Erste Bank, bonds with expected call dates in 2025 have been tendered and replaced with new issues over a year early.

After years of decline in China’s property market and limited, uncoordinated, and ultimately unsuccessful attempts by the country’s authorities to provide some sort of solution, details have emerged over the last few weeks of a more coherent plan to stop the bleeding.

Over the past decade, private credit has grown from a $400bn niche industry into a $1.6tr market that competes with more traditional asset classes for significant investor allocations.

George Curtis from the Multi-Sector Bond (MSB) team at TwentyFour Asset Management reflects on the third quarter of 2024 and its impact on credit and equity markets. Despite some mid-quarter volatility, overall performance remained strong, with government bonds leading the way.

As the third quarter of 2024 comes to a close, TwentyFour Asset Management's Aza Teeuwen reflects on what this has meant for the Asset-Backed Securities (ABS) team. Not only were volumes across European ABS elevated throughout July and August, we also saw €34 billion in primary issuance – a significant increase from previous years.