bond market

bond vigilantes

Bausparkasse: First postponement of a bond issue this year. Curves expected for credit market

“It was a 10-year covered bond from a small German building society, Bausparkasse. Probably too local to be representative, but it is certainly not positive news,” explain Santander analysts, who foresee a sharp reduction in bond issues in the second half of the year, after a record first half. As of last Friday, 16 June, €534 billion had been issued. Santander’s full year projections point to total issuance of €895bn…


Germany calls on EU to create joint financing instruments to counter US green plan

Intermoney| Despite central bank messages, the news that moved the bond market on Tuesday was German Chancellor Olaf Scholz’s request to the European Union to create joint financing instruments to counter the US green plan. Bond yields fell as investors reduced bets on the scale of monetary tightening and positioned themselves for more fiscal burden-sharing in the bloc. A slower pace of tightening is good news for Italian bonds, as…

Leverage loans. The next trigger?

Yield not equal to return

Chris Iggo (AXA IM) | Bonds have sold off a bit last week, but I believe that the bull market remains in place. Global monetary policy is about to be eased yet there are reasons to be relatively relaxed about the near-term growth outlook. The mini-bond sell-off will make yields a bit more attractive. However, yield does not equate to return unless you hold bonds to maturity and there remains scope for returns to be substantially higher than current yields, especially at the long-end of the maturity spectrum.

ECB niceTC

EUR low grade corporate bonds: Getting dressed up for the ECB

Markus Allenspach (Julius Baer) | We maintain our Overweight on EUR low-grade bonds against the backdrop of low money-market rates and remote recession risks. Moreover, we share the view of the market that the odds for a new corporate-sector purchase programme of the European Central Bank are rising, which could additionally lift bond prices.

zero rates

Lower rates, no recession

Chris Iggo (AXA IM) | Navigating through all the noise out there, it seems the most sensible expectation that investors should have is described by “lower rates but no recession”. Central banks were more dovish again this week and the Fed looks as though it is ready to meet markets expectations on cutting rates. There are risks to growth from a range of things, but we shouldn’t underestimate the power of the easier monetary policy message.


Action against climate change: too many ambiguities

Miguel Navascués | Everyone talks ever more passionately demanding that climate change be slowed by changing from energy based on oil and gas to one that does not produce CO2. But no-one explains if technological change will really allow this to happen in time.


stock market

Fixed income discounts a recession

Alphavalue | The increasing tensions in the trade war between the US and China have significantly raised prices in the bond market. While in Europe the yield on the Bund has fallen to -0.18%, in the US the T-bond is marking two years low with a TIR of 2.22%.

Change of cycle to cyclical stocks to defensive

JP Morgan just can’t agree

While the US bank’s chief economist in pointing to systemic risks, financial bubbles and market complacency, his colleagues in Spain believe “this tale about market manipulation is not real.”

ECB next meeting

European Government Bonds: Too Early For The ECB To Announce A Change In Guidance

Spain’s government bond rating has been upgraded by Fitch to A- from Baa+, Greece has also seen the rating lifted by Standard &Poor’s, and the US once again experiences a shutdown of non-essential government operations. The biggest topic for the bond market, however, will be the press conference of the European Central Bank (ECB) scheduled for Thursday.