I don’t think we need to hype this up; June could herald fundamental changes to our capital landscape. There is already a great deal to digest from last week’s ECB and OPEC meetings and even more to anticipate from pivotal votes on US interest rates (14-15th) and the UK’s EU membership (23rd) – in case … More Pivotal June
The ECB pulled out the big guns last week, including an extension to its quantative easing programme to encompass corporate bonds. The impact on the investment grade market has been immediate and dramatic, increasing fund flows, lowering spreads and creating record demand. But even amidst this renewed passion for Eurobonds, one issue got left behind … More Central banks, corporate bonds and the growing growth dilemma
Takeaways: Euro-dollar divergence and the weak commodities outlook are on the agenda this week as we await new pronouncements from the ECB and OPEC – keeping the Fed’s next move always in mind. Given this week’s fever pitch of speculation, the ECB might need to take pretty radical action to move markets further and keep … More Divergence and adjustment: looking beyond the ‘new normal’.
Takeaways: Surprise! China has lowered rates and Brussels has all-but promised more liquidity. So, that’s currency volatility back to the top of the agenda. Markets are treating these moves as good news – for now. In a few days, they could be read as an indication of the global economy’s dire straits – that’s just the … More From Brussels (and Shanghai) with liquidity
Takeaways: Well that was quite a quarter. A litany of ‘worst since’ for many global benchmarks, M&A records, a will-they-won’t-they Fed saga plus some spectacular share rollercoaster rides. We’re seeing rising confidence and investment in some areas, a maelstrom of concern in others. Perhaps the reason why we’re seeing such bifurcated views is because the … More Disruption, deflation and default
Takeaways: Efforts to limit direct exposure means Greece is increasingly morphing into a political, rather than a financial crisis; but that can quickly change if companies and markets freeze or the political crisis extends elsewhere. The ECB’s move today to extend QE asset eligibility was necessary in any case…and possibly pre-emptive.
Takeaways: With Greece on the edge, markets have maintained remarkable poise. Meanwhile, there’s a warning that UK interest rates might rise this summer. Another Maradona moment? Labour markets might be ‘fizzing’, but a rate rise this summer feels premature, with echoes of the ECB’s move in 2008.
Takeaways: It’s a week that’s pushed US and UK rate expectations back, brought ECB buying forward and dragged all three currencies, but especially the euro down. The UK’s brush with negative inflation added to the ‘loose’ narrative – just don’t call it deflation or get complacent. All this has helped steady bond markets, but it’s … More The minute waltz
Takeaway: Central banks take centre stage as the spotlight moves back to the Euro – via the Swiss Franc It was almost inevitable that the upbeat tone driving capital markets activity in the first two weeks of the year would be broken, but the nature in which it was broken was anything but expected. In … More Central banks take centre stage….
Takeaways: Some of the trends for the year discussed last week are already apparent in events during the first weeks of 2015. Innovation is driving IP-centric M&A and divergent economic performances is showing where future stress points may appear.