Negative bond yields aiding QE
The Corner | March 18, 2015 | What does negative bond yields mean psychologically for investors?
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Markets wait to hear Yellen
The Corner | March 18, 2015 | Attention will focus on Janet Yellen’s remarks later today, as markets await indication about the Fed’s plans on the issue of a rise in interest rates. Yellen will be speaking after the FOMC meeting, with speculation mounting that US economic projections may be strong enough to warrant a change in monetary policy. Analysts are speculating that a rates hike could happen as early as June, although the current strength of the dollar may delay any rise.
Morning report: Economic sentiment spurred by German strength
The Corner | March 17, 2015 | EU wide inflation figures are expected to be in negative territory for the fourth consecutive month. Elsewhere in Europe, data on employment and economic sentiment are expected to show slight improvement for the month of February.
Credit Suisse: The CHF 10bn Question
Exane BNP Paribas | Following the appointment of Tidjane Thiam as group CEO, there is more scope for a shift in strategy away from the investment bank and towards the wealth management business. Many investors compare this to when UBS announced their restructuring in 2012. In theory this should free up capital, and reduce the volatility of the earnings, enhancing the valuation. This sounds good so far, but we have to look at some numbers.
Morning briefing: US Fed language will focus attention
The Corner | March 16, 2015 | The week ahead is likely to be dominated by the FOMC meeting in the US. Market watchers are expecting some movement on the semantics of pronouncements by the US Fed. In essence, any change in language will signal that a rates hike from the central bank is drawing closer.
European bond rally may have reached a turning point
LONDON | March 14, 2015 | Barclays | German 10y yield bounced back to 0.248% after touching 0.186% on Thursday, while Italian and Spanish 10y spreads are 10bp above their trough. High yield credit spreads tightened while equities remained close to their cyclical highs. EURUSD is now trading at 1.06 after dropping below 1.05 on Thursday (its weakest level since January 2003). Europe’s IP edged down 0.1% in January, slightly weaker than expectations.
China has think tank quantity, but not quality
BEIJING | March 13, 2015 | By Fan Bi via Caixin | The country has the second-most think tanks in the world, but their weak research reports are not much use to policymakers.
The ECB: Game changer in fixed-income markets?
The Corner | March 13, 2015 | With its ambitious QE programme, the European Central Bank has become a new buyer in the debt market, absorbing almost 15% of total fixed-income debt in the eurozone. Who will benefit most in this new environment?
ECB sovereign bond buying already at €9.8
The Corner | March 13, 2015 | The ECB’s sovereign bond purchase programme has helped to reduce yields on Spanish bonds to record lows. Data from Italy is likely to show price falls in excess of 2%, while it will be no surprise to see further squabbling between Greece and its creditors over the weekend, particularly with yesterday’s intervention by the OECD.
Emerging markets = Investors’ Achilles heel
The Corner | March 11, 2015 | The market still points to emerging markets as one of the most vulnerable areas in the global economy. The absence of a rebound in the price of commodities (despite oil’s recent revaluation) is hampering these countries’ economic recovery.