Managing the downturn
As 2021 wore on we became increasingly concerned that the disconnect between asset prices, economic fundamentals and monetary policy was becoming more acute.
Insights Topic
UK
Buyers blunt BoE’s bond bombshell
Last week investors were faced with a double whammy of monetary tightening from the Bank of England (BoE), which on Thursday hiked interest rates by 25bp and announced the gradual unwind of its £20bn corporate bond portfolio.
Why central bank policy errors should be top of your 2022 worry list
With inflation soaring and the economic recovery looking more fragile, we look at three famous central bank policy errors to demonstrate why they can be so dangerous for investors, and consider how a fixed income portfolio can be strengthened against the risk.
Catching up the curve
Yesterday was a noisy day for the Bank of England (BoE) and European Central Bank (ECB), usually an undesirable situation for market participants.
UK RMBS floating above the fray
After a relatively quiet period during the closing weeks last year, the primary ABS market has enjoyed a solid start to 2022.
European ABS: Five things to expect in 2022
If 2021 was a bad year for global bond returns, it follows there were few natural shelters to be found within fixed income from the brunt of inflation and rates-driven volatility; the Barclays Global Aggregate Index (a widely used broad measure of bond performance) returned -4.7% in USD terms, while European investment grade credit returned -1.1% despite credit spreads tightening over the course of the year.
Three strategies for beating inflation with bonds
Inflation was the dominant theme across financial markets in 2021, and we think it is likely to be a big driver of returns again in 2022.
Why so quiet at the Bank of England?
It has been a very interesting start to the year in the rates sector of the market.
Specialist lenders lead stacked pipeline in ABS
The first two trading weeks of the year are coming to an end and unlike previous years they have been packed with activity.
UK banks pass the solvency test
As bondholders, we are comforted by all the banks passing such a severe test.
This is as good as it gets for linkers
Against a backdrop of 4.20% year-on-year UK consumer price inflation (CPI), if you got your timing right, linkers (inflation-linked UK government bonds) will certainly have outperformed conventional Gilts by some margin.
The Rodney Blog 2022: Policy, economy and markets must converge
What we are currently experiencing is a disconnect between monetary policy, the economy and the markets, a disconnect that in our view will struggle to survive much longer.