What will turn this market around?
For fixed income investors, the start to 2022 has been trickier than any we have experienced for many years, but we think this difficulty is to be expected and aligns with our macro view.
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TwentyFour
Making sense of corporate bond softness
After a challenging January, which saw markets beginning to come to terms with a very hawkish Fed pivot and rising Russia-Ukraine tensions, it is worth taking stock of the moves we have seen in fixed income over the last few weeks.
Catching up the curve
Yesterday was a noisy day for the Bank of England (BoE) and European Central Bank (ECB), usually an undesirable situation for market participants.
The CLO factory pauses for breath
The first month of 2022 has passed, and it’s been quite a roller coaster for broader equity and credit markets, with volatility climbing to its highest level since January 2021.
UK RMBS floating above the fray
After a relatively quiet period during the closing weeks last year, the primary ABS market has enjoyed a solid start to 2022.
Yields soften blow of Powell’s hard words
Powell’s hard line may have surprised investors, particularly in light of recent market volatility and increasing geopolitical risk in Eastern Europe, but the Fed’s fear of prolonged higher inflation looks to be trumping those concerns.
European ABS: Five things to expect in 2022
If 2021 was a bad year for global bond returns, it follows there were few natural shelters to be found within fixed income from the brunt of inflation and rates-driven volatility; the Barclays Global Aggregate Index (a widely used broad measure of bond performance) returned -4.7% in USD terms, while European investment grade credit returned -1.1% despite credit spreads tightening over the course of the year.
Why so quiet at the Bank of England?
It has been a very interesting start to the year in the rates sector of the market.
French government pulls the plug on EDF
Électricité de France (EDF) shares fell by as much as 25% on Friday morning after the French government announced exceptional measures to limit the impact of high electricity prices on French consumers, at the expense of the energy provider – the shares are down over 30% since start of December.
Specialist lenders lead stacked pipeline in ABS
The first two trading weeks of the year are coming to an end and unlike previous years they have been packed with activity.
Light at the end of the inventory tunnel
As we enter the third year of the pandemic, most market participants are asking themselves (once again) if this will be the year when supply chain issues finally abate.
Comprehending the latest Treasury spike
Given the swiftness of the Fed’s pivot we think risks are tilted towards the central bank doing more and not less. We wouldn’t even rule out a 50bp rate hike at some point.