Guy Haselmann, Head of Thought Leadership at MetLife Investment Management, recently sat down with Scott Pavlak, Head of Short Duration Fixed Income, to discuss interest rates and the investment landscape in short duration bonds. Guy: What a difference a year
The year 2022 proved to be a year of a great reset for fixed income aficionados. Bond prices are sharply lower and yields are meaningfully higher. Following a nearly 15 year period of ultra-low interest rates that starved pensions and
High inflation and increased interest rates should lead to only weak GDP growth. Central banks have not yet completed the cycle of interest rate hikes and geopolitical uncertainty could lead to increased volatility in financial markets for some time. We
Capital Group portfolio managers consider the latest interest rate rise from the US Federal Reserve and what we can surmise from the slower pace of hiking. The US Federal Reserve has slowed the pace of its interest rate hikes but
Amid sticky inflation, central banks are continuing to maintain a hawkish stance with higher peak interest rates anticipated compared to last month. Nonetheless …
Earlier this month, Cliff Asness at AQR wrote a really interesting piece about interest rates and how they may not be as related to the valuation or performance of growth or value stocks as we all think. This piece followed
EXECUTIVE SUMMARY The almost 25% market selloff has removed the S&P 500’s overvaluation, but we are still not at levels generally observed at bear market bottoms. Roughly one-third of our Bear Market Bottom Checklist has triggered. After being outright bearish
Following yesterday’s stronger than anticipated Eurozone inflation print, coupled with recent comments from various ECB members including President Lagarde, Vice-President de Guindos and Chief Economist Lane, the European Central Bank are expected to increase interest rates in July, the first
Value stocks outperformed through mid-February as investors repriced expensive growth stocks. Now, mounting inflation and rising interest rates are creating conditions for a broader value recovery, particularly for companies that have solid business fundamentals. Style return patterns have been erratic
US inflation in January surprised once again to the upside, with the headline and core figures jumping 7.5% and 6% year-over-year, respectively. However, we note that, although these prints are the largest since 1982 and, thus, do worry market participants,
Waarom een allocatie in unconstrained fixed incomestrategieën zinvol is voor beleggers. Het valt obligatiebeleggers te vergeven dat ze zich enigszins gedesoriënteerd voelen. Na een decennium van ultralage rentes en negatieve rendementen zit de inflatie …
Market weekly: Convertible bonds are hybrid instruments combining bond and equity characteristics. As a result, they offer some equity upside, but with bond-like protection on the downside. If we are at the start of a cycle of rising interest rates,
During this ½ day classroom session, Neil Schofield will introduce the basic principles of interest rate, asset and currency swaps. During the session you will learn about: Interest rate swaps LIBOR swaps OIS swaps Quoting conventions Asset swaps Creating synthetic
Amid a US economic boom, how high can rates go? The possibility of an economic boom this year has stoked worries about higher inflation and prompted a sharp selloff in US Treasuries. We spoke with fixed income portfolio manager Pramod
Just as the sudden shutdown of much of the global economy at the onset of the coronavirus pandemic in 2020 was unprecedented, the expected recovery in 2021 is likely to be unique. Developed market central banks seem determined to maintain …
Didier Saint-Georges, a Carmignac Strategic Investment Committee member, offers here his latest insights into financial markets, where a fair amount of turmoil is observable just when a new market environment could well be changing longer-term investor behaviour.
This month, BNP Paribas Asset Management treated us with their monthly asset allocation report that discussed key market drivers such as expectations for additional fiscal stimulus in the US. BNP Paribas AM is in their own words ‘’cautiously optimistic’’ because they argue that looking
Tension on bond yields mounted over the week as investors began to fear a strong economic rebound might fuel inflation. The $1.9 trillion stimulus plan in the US could cause some sectors, like commodities, to overheat.
Less interest, in negative interest rates. Markets at a glance – 8 February 2021 It was a game of two halves for macro markets last week. Italy won in the end, with the UK coming last. For Italian bonds, spreads
For many years nominal interest rates, largely from developed markets, served the dual purpose of providing stable income and diversification benefits in many multi asset portfolios. Yet with yields on these assets testing the zero boundary, the allure to owning them looks increasingly tarnished. A small move in price can wipe out your income for the year.
DNB starts implementation of new UFR curve January 2021 As announced last year, De Nederlandsche Bank (DNB), the regulator for Dutch pension funds, will start publishing interest rate curves with an adjusted methodology at the end of this month. Over
UK Defined Benefit Pension Schemes Should Prepare for Negative Interest Rates T. Rowe Price Insights on Fixed Income Negative interest rates are likely coming to the UK, but you would not know that judging from the markets. Although rates are
The role of gilts in portfolios could be impacted. Negative interest rates are likely coming to the UK, but you would not know that judging from the markets. Although rates are widely expected to fall, implied policy rates show that the
Investment Insights While each crisis is different, what is striking about this global pandemic is that (excluding China) the impact on emerging market assets appears to be more dire than the spread of the virus itself to those countries. The
LDI Deep Dive Series Part 1: The impact of interest rates on investment returns Investors with future liabilities are normally exposed to interest rate risk. A fall in interest rates will increase the value placed on future liabilities. By adopting a
Column by Hendrik Tuch, Head of Fixed Income “Interest rates and yield curves have seen quite some volatility in the last few weeks as markets digested the election news and the coronavirus headlines. Ahead of the US elections, many investors
Since the global financial crisis, interest rates have been anchored at unprecedented lows. At the same time, stock and bond investments have produced positive returns along with bouts of significant volatility. This has left many investors questioning long-held return expectations
The battle between public health officials and COVID-19 continues, and, as we had feared, cases in the United States increased significantly in recent months. However, global economic …
#34 The holidays are coming to an end and you might have to catch up on research. Hereby a quick overview of the best read research on OpinioPro this last week. A variety of topics is addressed – you can
April In this blogpost, we will update you on our monthly best-reads and longest-reads. If you follow our weekly blogposts, you know the best read research articles on a weekly basis. In this monthly overview, we provide you with a
Short Note ECB ECB Council Meeting At its meeting which ended today, the Governing Council decided on two further measures aimed primarily at ensuring that banks had sufficient liquidity at low interest rates. The ultimate goal is to keep lending
SARS-CoV-2 to weigh on economic outlook Since the outbreak of the new Coronavirus in China at the end of December 2019, the situation has changed significantly. The number of infected people is tenfold compared to the SARS epidemic from 2003
I have always been a middle-distance runner, a fact for which I must credit the Dublin bus service of my school days. Dublin was supposed to be a bus-friendly city and the main roads all had bus stops every quarter
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
Core Matter – Almost ten years of record low interest rates have raised leverage in the non-financial sector as well as investors’ tolerance for riskier and less liquid instruments. As a result, the average quality of corporate debt has worsened.
Investors Need Yield With both the US Federal Reserve and the ECB unlikely to raise interest rates in coming months, and the subsequent impact on government bond and money markets, investors are now desperately searching for their required income elsewhere.
Clients regularly ask us why interest rates are so low and why differences in compensation between categories of fixed-income securities are so large. One example is the atypically high yield difference between interest-rate swaps and German government bonds – the
Occasional Paper Series Using a wide range of models we document a protracted fall in the natural (or neutral) rate of interest in advanced economies, driven by ageing, waning productivity growth, a rise in mark-ups, and a surge in risk
On a personal level, summer is often a season that affords an additional measure of leisure. Some take vacations, while those still at their posts often leave on time to enjoy the long evenings. As we move through the summer
On a personal level, summer is often a season that affords an additional measure of leisure. Some take vacations, while those still at their posts often leave on time to enjoy the long evenings. As we move through the summer
In Depth Back in 2014, PIMCO developed the concept of The New Neutral as a secular framework for interest rates. After the financial crisis, the global economy entered a new regime in which the equilibrium (i.e., neutral or natural) policy
Working Paper I Smart Beta Investment Strategy At the dawn of a potential rise in rates triggered by Central Banks in both Europe and the United States, doubts are being raised about the ability of low-volatility portfolios to continue to
Here’s Why You Shouldn’t Be Should tighter monetary policy on both sides of the Atlantic worry bond investors? We don’t think so. Bonds have historically delivered positive returns when interest rates rise—particularly when they rise gradually. Of course, we appreciate
Executive summary The yields on long-term bonds no longer tie in with fundamental economic data like inflation and economic growth. The deviations can be explained by the impact of monetary policy. A marked change has meanwhile occurred in the way
Investors currently buying UK government bonds are doing so in the knowledge that they are accepting a yield which is lower than the rate of inflation, i.e. the real yield is negative. Surely this doesn’t make sense and so yields
After a long-term downward trend, we believe that the upward turn taken by interest rates in the second half of 2016 may continue. Many investors are over-exposed to interestrate risk in the form of duration, the central risk dominating the
Euro Rates Watch The DSTA will auction its 5y benchmark for the last time tomorrow The target range is EUR 2-3bn, we expect an issuance size at the low end of the range The Dutch transaction will take place in
