Global Fixed Income Macro
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How to navigate escalating trade disputes
The recent escalation in U.S.-China tensions reinforces our view that trade and geopolitical frictions have become the key driver of the global economy and markets. We stress the importance of portfolio resilience in this environment, yet view the decisively dovish
Trade concerns continue pressuring Treasury yields lower
U.S. Treasury yields declined again last week, with the yield difference between the 3-month T-bill and the 10-year Treasury note inverted further. Market expectations for a Federal Reserve (Fed) rate cut at the September meeting are high. However, the magnitude
Investment Monthly August 2019
Fed cuts rates A lack of inflation pressure allows the US Federal Reserve (Fed) to lean against the increased downside risks to growth. While market pricing may prove to be too aggressive, some “insurance” policy easing is very likely The
The Fed’s About-Face Complete Amid Dissent
As Federal Reserve officials have been signaling in recent weeks, the Fed cut its target Fed funds rate by 25 bps to a target range of 2.0%-2.25% at the policy meeting that ended on July 31, marking its first interest
Macrocast – How to feed your dragon
Sometimes monetary policy is akin to feeding dragons: markets tend to be insatiable, and they may end up burning you. Indeed, there seems to be no end to what the market wants from central banks. We have seen it in
Fed cuts rates
The Federal Reserve reduces interest rates At its July meeting, the Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) cut the target range for the fed funds rate to 2.00-2.25%, in line with market expectations. Two FOMC
The yuan, tariffs and your portfolio
A surprise tariff announcement by the U.S. met with an unexpected depreciation in the Chinese currency, sending shock waves across global markets last week. This latest escalation in U.S.-China tensions reinforces our view that trade and geopolitical frictions have become
5 key investment themes for the remainder of 2019
Rick Rieder and Russ Brownback highlight the investment themes that they think will drive markets and dominate debate within the investment community over the next several months and beyond. Over recent weeks, we have been vocal about five “big themes”
On the escalation path
For now, the trade conflict between China and the U.S. is unlikely to ease. Markets are understandably nervous. Last week, the U.S. President once again shocked the markets by announcing that all imports from China will be subject to punitive
Central banks support markets amid trade risks
We see the dovish pivot by global central banks supporting the economic expansion and risk assets, with rising protectionism the key risk. Elga explains. The Fed confirmed global central banks’ dovish pivot last week, as it cut rates for the
Central Banks are committed to reassuring investors
The Fed and the ECB have managed to firmly establish lower interest rates while pushing risk assets higher. Investors are sceptical amid high political and economic uncertainty but, at least for the time being, the central bank actions have helped
The Federal Reserve: Dealer’s Choice
Beyond Bulls & Bears The US Federal Reserve cut its benchmark short‑term interest rate for the first time in 11 years in what Chairman Jerome Powell called a “mid‑cycle adjustment” to sustain the US economic expansion. Powell appeared to struggle
Why is the potential for US currency intervention a topic of interest?
IN BRIEF The potential for unilateral US intervention in the currency markets to weaken the US dollar is increasing as the US administration becomes more frustrated with the dollar’s persistent strength. Discussions over intervention could intensify if expected US interest
FOMC cut interest rates, but markets wanted more
As expected, the US Fed's interest rate decision-making body (FOMC) lowered the range of its key interest rate by 25 basis points to between 2% and 2.25%. The assessment of the economy has not changed significantly. The labor market and
Review of markets over July 2019
After an exceptionally strong start to the year, financial markets paused for breath in July, with most asset classes delivering muted returns. The Federal Reserve (the Fed) lowered US interest rates for the first time in 11 years, and the
Global weekly commentary
Weekly Commentary Key points 1 We see government bonds retaining their crucial role as portfolio ballast, even after their yields have plunged. 2 The European Central Bank (ECB) kept interest rates unchanged, but explicitly opened the door to future easing.
Why should you own government bonds?
Mike explains the importance of government bonds in building portfolio resilience and share tips on how to do so. We see raising portfolio resilience as a key theme for investors – not only for this year but over a long
Why the central banks backstop is working
Russ discusses how central banks once again have investors’ backs. The global economy continues to struggle with sluggish growth. Trade frictions have not erupted, but nor have they been resolved. Iran just seized a British tanker and BlackRock’s Global Index
What will FOMC tell markets?
Next week's meeting of the Federal Reserve's interest rate setting body (FOMC) will be the main focus of markets. In line with the majority of market participants, we expect a rate cut of 25 basis points. Fed Chairman Jerome Powell's
Bond ETFs are feeling the flow
Now at $1 trillion, bond ETFs are a blockbuster innovation that offer potential benefits to all investors It was a suburban teenage conundrum. I’d bike to Blockbuster Video only to find the much-coveted new releases out of stock. What to
Debt ceiling and the Fed pressure Treasury yields lower
U.S. Treasury yields declined slightly last week, led by longer maturities. Concerns over the impending debt ceiling debate spurred demand for high quality securities like Treasuries. The market is pricing in 100% certainty that the Federal Reserve (Fed) will cut
Ultra dovish Central Banks put fixed income investing back to the core
A slowdown in global growth, with subdued inflation and dovish central banks (CB) committed to avoiding further economic deceleration, is a trend that, in our view, should remain favourable for bond investors. On one side, this should limit the upside
Europe at a crossroads: The time for bolder policy action is at hand
Rick Rieder argues that anemic growth in Europe is a longstanding problem that today requires a bold solution. Institutionally, the ECB can offer potentially effective, if unconventional, help. A shorter version of this commentary appeared in the Financial Times on
July Investment Strategy – Prevent horizon: US sidesteps recession for now
The US economic slowdown remains modest – the world’s largest economy looks set to avoid a recession in the next 12 months, thanks to the Fed’s monetary easing Eurozone macro data and easing in the US, should lead the ECB
Asset Allocation Consensus Augustus
