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The City of London

Markets 18th March 2015

High Yield: QE heats up City of London

LONDON | March 18, 2015 | By Víctor Jiménez | The effects of QE have already begun to reverberate through the arteries of Europe’s financial heart in the City of London. Indeed, there is a tsunami of money flooding the market, corporate bonds sub-investment market. That below triple B ratings market is the ‘acid test’: the ECB’s bet has been dragging down the price of investors and asset managers’ portfolios, who are desperate to find substantial interest rates and return to positive territory.

General Motors 3 TC

Markets 18th March 2015

GM races to placate shareholders

WASHINGTON D.C. | March 18, 2015 | By  Pablo Pardo | On December 19, 2008, George W. Bush announced that the US would allocate $13.4 billion to rescue General Motors. Between April 22 and June 1, 2009, Barack Obama provided the company with $36.1. In the end, the state ended up with a 61% of the stake of what is still the second largest car manufacturer in the world.

yellen01TC

Markets 18th March 2015

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.

A close up of a dollar note

Markets 15th March 2015

The dollar’s unsettling upsurge

MADRID | March 15, 2015 | By JP Marín Arrese | The markets have discounted an unchallenged drift upwards of the US currency, after the ECB embarked on its ambitious asset-buying scheme. Yet few anticipated the move might come so soon and reach such a rapid pace. As the Euro turns its retreat into a disorderly rout, emerging economies like Brazil are falling under unbearable pressure. The dollar’s swift upsurge has pounded global markets. 

eurozone industrial output

Markets 14th March 2015

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.

Yields are growing–for how long?

Markets 11th March 2015

Yield gap growing –For how long?

The Corner | March 11, 2015 | The euro sinked to 12-year lows on Wednesday due to the ECB’s money printing –which is pushing yields down (German 30-year government bonds are now lower than those on U.S. two-year paper), and increasing expectations of a rates hike on the other side of the Atlantic. ECB’s Governing Council member Ewald Nowotny insisted that negative bond yields in the euro area probably won’t remain for long.