The TwentyFour Blog
PMIs below expectations in Europe and the UK
Felipe Villarroel looks at the preliminary numbers for July PMI Manufacturing and PMI Services data, and how from a markets point of view, he thinks volatility will remain in place while both rates and spreads should trade in a range as we await for more clarity on whether inflation will allow Central Banks to pause and the extent of the slowdown in H2, particularly considering August is looming.
Reinvestment risk growing, along with the soft landing narrative
What level of risk are investors willing to take? As central bank rates hike and a soft landing narrative makes its way into analysts’ forecasts, Eoin Walsh takes a look at what affects this has on investment risk and reinvestment risk.
Soft landing narrative taking hold
What sort of landing will the global economy experience? With the recent release of the US CPI report, inflation has been on a downward trend and the resilient activity data has continued to surprise many. This report has acted as a trigger of sorts for increasing calls for a soft landing.
Two interesting reports by the Bank of England
The Bank of England has released two reports, namely the Bank of England’s UK Banking Sector Stress Test and the Credit Conditions Survey. Felipe Villarroel discusses the findings in these reports.
Is the UK Labour Market easing at the margin?
Following the release of the Monthly Labour Market Overview, Felipe Villarroel highlights key takeaways on the tightness of the UK’s labour market. He assesses the changes to the demand and supply of the labour force - focusing on the ‘Inactivty Rate’, “Long-Term Sick” and “Retired” categories, and migration trends - and what this means for wage inflation.
A new theme to the upcoming earnings season
As we enter earnings season, Felipe Villarroel believes a new topic of interest on many market participant's mind is US regional banks. From a macro point of view, one topic markets are likely to focus on includes to what degree, if at all, have deposits returned in any size to the sector?
A helpful technical
As mid-year investment bank reviews hit our screens, we are seeing a shared expectation of spread decompression between IG and HY bonds, signalling rising defaults. Pierre Beniguel argues that tightening HY spreads and resilient performance suggest surprising sector support due to lower issuance and available cash.
Thames Water - Green is not always clean
Thames Water has been in the headlines for all the wrong reasons in the past week. In our latest blog, Johnathan Owen explores their operational struggles, how the potential nationalisation raises concerns for investors and the wider implications for green bonds.
Of averages, medians and Fed funds rates
Felipe Villarroel discusses the observations of the median long run rate and what this means for the neutral rate.
Rainbows from Barca
Last week Aza Teeuwen and our ABS team visited the Global ABS conference in Barcelona. One key discussion point in CLOs was around the lack of leveraged loan supply and the resultant sharp slowdown in the primary market
Central Banks did not rock the boat
In a week with several important releases and monetary policy decisions, what have we learnt?
BBVA take a significant step forward for AT1s
BBVA have announced they are issuing a new AT1. What does this mean for the market? Eoin Walsh believes this could be the catalyst investors have been waiting for to help AT1 spreads grind tighter.