Wall Street Journal (October 9)
“Investors worried about the recent pullback in stocks are counting on the coming earnings season to give them something to get excited about. For much of 2023, U.S. stocks roared higher despite lackluster corporate profits. But an accelerating selloff in bonds has pushed longer-term yields near their highest levels in more than a decade, denting enthusiasm for stocks.”
Tags: 2023, Bonds, Earnings season, Investors, Lackluster, Profits, Pullback, Selloff, Stocks, U.S., Worried, Yields
Investment Week (June 12)
“Earlier this month, US Federal Reserve Chairman Jerome Powell said he does not expect inflation to decline quickly, signalling resistance against the market consensus. We believe it would have to be a severe economic recession for the Fed to begin cutting interest rates before the end of the year, as is currently priced in by the forward markets. Therefore, we believe, interest rates will remain ‘higher for longer’. This is inherently positive for MMFs, where yields and total returns are driven for the most part by central bank rates. A higher-for-longer interest rate trajectory could potentially yield 4.5% to 5% for MMFs in US-dollar terms in the next three, six and 12 months.”
Tags: 4.5% to 5%, Consensus, Fed, Forward markets, Higher for longer, Inflation, Interest rates, MMFs, Powell, Recession, Resistance, Total returns, U.S., Yields
Financial Times (January 14)
“Since the Bank of Japan stunned markets by widening the band of its yield curve control (YCC) policy on December 20, markets feel things are now moving tectonically for one of the developed world’s most unorthodox financial regimes.” At long last, the ‘widow-maker’ trade “is making money. On Friday and for the first time in almost a decade, yields on the benchmark 10-year JGB rose to 0.53 per cent and, critically, outside the BoJ’s target band in defiance of its ever more desperate efforts to fight the market.”
Tags: 10-year, Benchmark, BOJ, Control, Defiance, Desperate, Financial regimes, JGB, Markets, Target band, Widow-maker trade, Yield curve, Yields
Forbes (June 28)
“The question on everybody’s mind in the crypto world is whether we’ve reached the market bottom. Nearly $2 trillion in crypto market value has evaporated since November…. But the fallout is far from complete.” With over “600 crypto exchanges around the world operating in a largely unregulated frontier,” there are others that are already insolvent. Many promised unreasonably high yields, which “worked fine when crypto was going nowhere but up. It looks disastrous now.”
Tags: Bottom, Crypto, Crypto exchanges, Fallout, Insolvent, Market, Promised, Unregulated, Value, Yields
The Economist (November 6)
“Global bond markets are wakening from a long slumber.” The Fed “will wind down its vast bond-buying programme” just as bond investors react to higher inflation. “Across a group of 35 economies, five-year bond yields have risen by an average of 0.65 percentage points in the past three months.”
Tags: Bond markets, Economies, Fed, Global, Higher inflation, Investors, Wind down, Yields
Wall Street Journal (October 3)
“Investors propelled bond yields to multiyear highs Wednesday as robust economic data and an easing of trade tensions across North America sparked fresh optimism about the global growth outlook. Wednesday’s bond rout sent the yield on the 10-year U.S. Treasury note, a closely watched barometer of investors’ sentiment toward growth and inflation, to its highest level since July 2011.”
Tags: Bonds, Economic data, Growth, Highs, Inflation, Investors, Optimism, Sentiment, Trade tensions, Treasuries, U.S., Yields
The Economist (March 9)
“The spread of exotic grains is evidence that globalisation works.” You may mock quinoa and other hip foods, but they are welcome sign “of rising prosperity and expanding choice. The spread of better farming techniques has raised yields, helping humanity feed itself despite a rising population.” In contrast, “plans to erect trade barriers and possibly start a trade war” deserve derision. They “would make the world poorer and hungrier.”
Tags: Exotic grains, Expanding choice, Farming, Globalization, Humanity, Population, Prosperity, Quinoa, Trade barriers, Trade war, Yields
The Independent (July 3)
“The economic threat facing the world is bigger than Brexit…. Something remarkable, and disturbing, has happened in recent days that carries a worrying message about the future of the world economy: the plunge in yields. They are lower now than they have ever been before – yes, ever – and they keep on falling. And the message they carry is that there will be a world-wide recession.”
Financial Times (May 20)
“The plunge in yields on corporate and sovereign bonds in Europe and Asia — the value of bonds with a negative yield is nearly $10tn, according to Fitch — has sent investors racing into the US market.” This surging demand “has allowed companies to issue debt at lower yields, though US yields are still more attractive than in other parts of the world.”
Tags: Asia, Bonds, Corporate, Debt, Demand, Europe, Fitch, Investors, Negative yield, Plunge, Sovereign, U.S., Yields
Institutional Investor (May 6)
Unconventional monetary policy, demographic change, economic challenge and technological disruption are impacting debt markets. “Remarkably, the pool of positively yielding debt in the global fixed-income universe has shrunk by more than $5 trillion in less than two years, which clearly presents a tremendous challenge for investors seeking income and attempting to match assets to liabilities.”
Tags: ALM, Challenge, Debt markets, Demographic change, Economic challenge, Fixed income, Monetary policy, Technological disruption, Unconventional, Yields
