Abstract: Academics and research analysts in financial economics frequently use returns on government bonds for their empirical analyses. In the United States, government bonds are also called Treasury bonds. The Federal Reserve publishes the yield-to-maturity of Treasury bonds. However, the
Emerging market bonds shrugged off recent trade warrelated concerns to strengthen in June. Local currency bonds, measured by the JP Morgan GBI-EM Global Diversified Index, returned 5.5% during the month, outperforming hard currency bonds, measured by the JPMorgan EMBI index,
Historically, fixed income investors have been able to generate a healthy income stream from high quality bonds. However, given the current environment of ultra-low yields, income has been harder and harder to come by. With the Fed poised to cut
It is all relative in the global capital markets. Over the last year or so, the high currency-hedging cost has made US dollar corporate bonds less attractive for international investors despite the relatively high level of US yields. This is
Quarterly Analysis At a glance… – New manager searches illustrate a strong focus on improving portfolio resilience. Within equities this manifests as appetite for low volatility and quality; in fixed income we see increased interest in investment grade bonds versus
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
Core government bond yields continued their lurch lower as volatility remained elevated, driven by further escalation in trade rhetoric and the unexpected re-fixing of the Chinese yuan fix to above 7. This retaliatory action led the US Treasury to formerly
Lega leader Salvini's doubts about the continued existence of the governing coalition were followed by Prime Minister Conte's announcement that he would convene parliament next week to ask for a vote of confidence. Early elections have therefore become very likely
Multi Asset Monthly With the US threatening to increase tariffs on an additional USD 100 billion of Chinese imports from 1 September, there is a considerable risk that this increased uncertainty will dampen business confidence and capex spending. To the
Current Strategy | August 2019 We see a range trading environment for EM, supported by Fed monetary easing and likely easing by other major developed and EM central banks. This should offset President Trump’s latest threat to impose new tariffs
Raising resilience is one of our three investment themes for the remainder of 2019 and beyond. The ability of a portfolio to withstand a variety of adverse conditions is crucial, particularly in a time of elevated macro uncertainty. Bonds’ role
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
Although widely anticipated and undoubtedly reflected in current pricing, a rate cut by the Federal Reserve nevertheless could trigger a short-term risk asset rally as past cuts have done. Nevertheless, we believe credit spreads will remain rangebound for the remainder
How low can we go? With the European Central Bank (ECB) set to resume quantitative easing, can European high yield spreads return to their lows of the last time around?
Below is an overview of the key macroeconomic developments we expect to help determine our overall risk budget and inform our bottom-up security selection process in the second half of 2019: 1. Populism—Populism is the enemy of globalization, the pullback
Post-crisis leverage rules have constrained overnight lending in the critical market for shortterm loans called repurchase agreements or “repos” but banks and others have been developing solutions to help minimize the impact. As a result of the rules, many banks
Key points: Performance for inflation-linked bonds has been positive since the start of the year Compared to the current inflation rate, breakevens are trading at a depressed level Beyond oil prices, stabilisation in economic growth outlook could boost inflation
Fixed income markets are fixating on one simple question: Is the US heading toward a recession anytime soon? The answer, of course, isn’t so simple. While recession concerns have lessened so far this year compared with the high anxiety investors
Uncommon truths It’s been a good year for all assets. The fact that equity markets have reacted positively to falling bond yields may suggest a change in the correlation regime. We remain sceptical about that and stick with absolute equity
The U.S. Treasury yield curve steepened last week. Federal Reserve (Fed) Chairman Powell all but ensured a rate cut in July, and markets reacted strongly to a higher-than-expected inflation reading for June. As a result, yields for maturities of two
A relatively benign G20 summit and expectations for easier financial conditions ahead have boosted demand for emerging market debt. However, areas of value can still be found. Fundamentals: The growth trajectory of emerging markets remains intact following the recent G20
Weekly Bond Bulletin 11 July 2019 A relatively benign G20 summit and expectations for easier financial conditions ahead have boosted demand for emerging market debt. However, areas of value can still be found. Fundamentals: The growth trajectory of emerging markets
Webcast: Tuesday 16th July 2019 at 9.30 am CET Join Ariel Bezalel, manager of the Jupiter Strategic Bond Fund and Head of Strategy, Fixed Income for his latest quarterly update. Ariel will discuss his macroeconomic views as well as recent performance
Gathering clouds over global economic growth have turned both the ECB and Fed more dovish. The ECB is preparing for more stimulus to the euro area economy unless the outlook improves, while Fed Chairman Powell hinted at preparedness for an
Portfolio Manager John Fujiwara explains how equity and bond views of the U.S. economy are at odds with each other following the Fed’s dovish pivot.
