Is there value in floating rate bonds?
Last week both the Fed and the BoE hiked rates by 0.25%, and judging by the Fed's dot plots and comments from the Bank of England (BoE), more hikes will likely follow in the coming months.
Insights Topic
Monetary Policy
Powell confirms Fed pivot is complete
Officially the Fed pivoted from its ‘transitory’ inflation rhetoric in December last year.
BoE sounds caution on the real economy
The hawkishness of the Fed on Wednesday paved the way for the Bank of England (BoE) to follow suit.
Investors face conundrum on government bond allocations
We think a base case that central banks will follow a more measured monetary policy path than markets are currently pricing in is reasonable given the current backdrop.
Steady Fed makes short end look attractive
Escalating geopolitical tensions have contributed to a volatile past week for investors, but uncertainty regarding central bank action continues to dominate the bond markets, with one investment bank now predicting nine straight hikes from the Fed beginning at its March meeting.
What are government bonds saying?
Yield curve shape and yield curve change are often good predictors of the state of the economy and its outlook.
Buyers blunt BoE’s bond bombshell
Last week investors were faced with a double whammy of monetary tightening from the Bank of England (BoE), which on Thursday hiked interest rates by 25bp and announced the gradual unwind of its £20bn corporate bond portfolio.
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.
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.
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.