Macroeconomics

US banks remain bullish about the health of the consumer, but credit spreads are still pricing in not only a recession, but a fairly severe one. Are the banks wrong? Or have credit markets just backed up too far on negative fund flows?

With corporate bond spreads having risen to not far short of crisis levels, Johnathan Owen argues the 4%-plus yields on offer in short dated investment grade are an attractive entry point for investors that might not be around for long.

With investors seemingly unwilling to put money to work until they see clear evidence of the inflation trend reversing, Felipe Villarroel looks at two developments that tentatively suggest central banks’ delicate balancing act is actually working.

After H1 2022 broke market records for all the wrong reasons, Gary Kirk says fixed income outflows could reverse quickly if investors see evidence that central banks are turning the tide on inflation.

Aza Teeuwen explains how market moves have impacted BB CLOs and looks at historic trends analysing their behaviour during crisis scenarios.

Given inflation has been running hot for more than a year now, it was no surprise to see the recent dip in US data greeted with a muted sigh of relief across the markets.

We can debate whether the European Central Bank is behind the curve or not, but Christine Lagarde says rates will be in non-negative territory by September.

With investors having endured a painful period of rising yields in 2022, Mark Holman looks at whether rates weakness or credit spread widening has been most to blame.

Consumers are being hit from seemingly all angles at the moment. Higher interest rates are coming, higher inflation is already hitting their pockets hard and economic growth is expected to slow.

As inflation continues to outstay its welcome in the global economy, we have previously discussed the impact of rising input costs on corporates and how crucial pricing power can be in such a challenging environment.

The broad-based sell-off that has faced investors since the start of this year has been all the more painful because of the breakdown in traditional correlations, which has put conventional hiding places out of reach.

With inflation running at 40-year highs in many parts of the world, it is easy to get carried away with making comparisons to the dark economic days of the early 1980s.