TwentyFour

In the early 1990s, Marvel comics introduced a world 100 years in the future with new stories for its popular heroes and villains. Doctor Doom's story was called "The Doom of Tomorrow".

This is a crucial week for Turkey’s economy and the Central Bank of Turkey’s credibility.

Since that first encounter the market has remained a core financing option for banks’ consumer and corporate lending books, but there has always been a degree of innovation around the fringes.

UK specialist insurer Rothesay Life came to the market yesterday, the latest company to issue in the fledgling RT1 sector introduced by the regulator as Solvency II compliant capital.

Last Friday we were surprised that a comment from a G7 finance minister, which should have been taken highly positively, was somewhat skipped over by the markets.

Our attention this morning was grabbed by a headline from Italy’s La Stampa, which reported that Finance Minister Giovanni Tria is preparing a 2019 budget that will result in a 1.5% deficit/GDP ratio for the indebted EU nation.

Last year, with credit spreads tightening close to historic levels, it seemed appropriate to us to take a more prudent stance and move to a more balanced portfolio.

Like many of you we have been following the latest developments in the Tesla story with interest and curiosity, though fortunately not as investors, I hasten to add.

Fixed income investors globally face a huge challenge defending returns against rising rates and resurgent volatility. The Federal Reserve’s famous ‘dot plots’ are projecting two more quarter-point rate hikes in 2018 and a further four in 2019, which if carried out would take the upper bound of the Fed Funds rate to 3.5%. Other central banks may be lagging on the path to policy normalisation, but the direction is set and in all likelihood the low yields of this cycle are now behind us.

Typically in August, credit liquidity becomes a bit like my lawn this summer: patchy. Over the past few weeks there have been a few stories of large fund groups seeing significant outflows from the asset class, and even of liquidations, which begs the question: what are they selling?

We have had a lot of discussion, both internally and externally, over the last few days around when might be the time to begin adding more risk to portfolios again.

Following on from the release of solid Q2 numbers, and no longer in a closed-period, Barclays were quickly out of the blocks and announced the issue of a new AT1 this morning; a $2bn transaction with initial price talk of 8%.