The Economist (July 18)
“It is too darn hot. On July 14th the surface temperature of Earth’s tropical and mid-latitude oceans was higher than on any other July 14th in modern records. The same was true for every other day in July, and for almost all of the days in June, too. Europe has gone through three heatwaves since May, and though the continent is better prepared for such things than it used to be, tens of thousands will have died as a result.”
Tags: Bessent, Bonds, Conflict, Currency, Decipher, Dollar, Fiscal concerns, Inflation, Investors, Markets, Middle East, Reassess, Trade war, US, Warsh
Bloomberg (April 6)
“Chinese bonds may be reaching an historic turning point, with yields climbing from record low levels as deflationary pressures ease and expectations for monetary loosening recede…. Sentiment in the largest emerging debt market has shifted after a slew of upbeat data, from a surprise growth rebound to slower factory-gate price declines, cast fresh doubts on the deflation-driven narrative that has dominated trading in recent years.”
Tags: Bonds, China, Deflationary pressures, Emerging debt market, Expectations, Growth, Historic, Monetary loosening, Rebound, Record low, Sentiment, Turning-point, Upbeat, Yields
Investments and Pensions Europe (April 1)
“Dutch pension funds were net sellers of US assets last year, reallocating capital towards Europe, according to figures from regulator DNB. On balance, funds sold €30bn of US equities and bonds, while purchasing €23bn of European securities.”
Tags: €30bn, Assets, Bonds, Capital, Dutch, Equities, Europe, Net sellers, Pension funds, Reallocating, Regulator, Securities, U.S.
Financial Times (January 19)
“Trump’s bizarre designs on Greenland and his willingness to inflict financial pain on allies” mean that “the U.S. has squandered its most valuable financial asset: trust. It risks paying a heavy price for this for decades to come.” The U.S. remains the only market “big enough to absorb” giant capital flows so this “is not about ‘sell America.’” Europe is not going to sell its $8 trillion worth of Treasuries overnight. Rather, Trump’s latest move provides “a big incentive for investors to buy more bonds and stocks from elsewhere over time…. to spread things a little more globally.”
Tags: $8 trillion, Allies, Asset, Bizarre, Bonds, Capital flows, Europe, Financial pain, Greenland, Heavy price, Incentive, Investors, Risks, Sell America, Squandered, Stocks, Treasuries, Trump, Trust, U.S., Valuable
Market Watch (January 14)
“For investors, a meaningful erosion of central-bank independence would weaken the Fed’s inflation-targeting discipline and be negative for both stocks and bonds, as markets have long operated under the assumption that Fed independence will hold.” Although “we do not expect the Trump administration to capture the Federal Reserve, continued pressure on central-bank independence is likely to weigh on the U.S. dollar.” Ultimately, “market calm is conditional on the Senate acting as a backstop to Fed independence. If that condition is misread, markets will break down.”
Tags: Bonds, Capture, Central bank, Discipline, Dollar, Erosion, Fed, Independence, Inflation, Investors, Markets, Negative, Senate, Stocks, Trump, U.S., Weaken
The Economist (July 11)
“Growth is abysmal; wages are low. But seen from the outside, Britain is a great place to contract services and buy bargain-basement bonds.”
Tags: Abysmal, Bargain-basement, Bonds, Britain, Buy, Contract services, Growth, Low, Wages
Reuters (May 29)
“The U.S. dollar’s unusual moves in April, when it fell in tandem with stocks, has cast doubt over a long-lasting relationship between the greenback and risky assets. Over time, it might nudge non-U.S. investors to hedge more or reduce their exposure to American stocks and bonds. Both could create a self-reinforcing downward cycle for the dollar.”
Tags: April, Bonds, Dollar, Doubt, Downward cycle, Exposure, Greenback, Hedge, Non-U.S. investors, Relationship, Risky assets. Over, Self-reinforcing, Stocks, Unusual moves
Washington Post (May 19)
“Markets came under pressure Monday morning as investors dumped stocks, U.S. bonds and the dollar in early trading after the United States lost its triple-A bond rating, signaling new worries about the outlook for the world’s largest economy amid President Donald Trump’s trade war and heightened federal deficits.”
Tags: Bonds, Dollar, Dumped, Economy, Investors, Markets, Outlook, Pressure, Rating, Stocks, Trade war, Trading, Triple-A, Trump, U.S., Worries
Market Watch (May 5)
“Taiwan’s currency is exploding,” as are fears about the “$767 billion of foreign assets held by Taiwan’s life insurers.” In a “classic case of liability and asset mismatching,” Taiwan’s life insurers “have put their assets into U.S.-dollar-denominated bonds… without hedging the currency risk.” This has resulted in “what’s called a 19-sigma shock,” as the Taiwanese dollar strengthened dramatically, exceeding “the typical move by 19 standard deviations in a world where a 3-sigma event is…. much rarer than even 1 in a trillion.”
Tags: $767 billion, 19-sigma shock, Bonds, Currency, Currency risk, Dollar-denominated, Exploding, Fears, Foreign assets, Hedging, Liability, Life insurers, Mismatching, Taiwan
New York Times (April 21)
“President Trump’s trade war has completely upended investment flows, with global investors selling off U.S. stocks and corporate and government bonds at a clip unlike anything Wall Street has seen in recent years.” Though some semblance of “calm returned to the corporate and government bond markets late last week,” analysts are still wary of “Trump’s next moves, fearing that his protectionist policies and threats against federal institutions could re-accelerate money flows out of the United States, hitting the dollar especially hard.”
Tags: Analysts, Bonds, Calm, Corporate, Global investors, Institutions, Investment flows, Markets, Money flows, Protectionist, Stocks, Threats, Trade war, Treasuries, Trump, U.S., Upended, Wall Street
