The ‘Rodney’ Blog 2019: Fake Recession Ahead
“This time next year, Rodney…”
Insights Topic
TwentyFour Blog
With ABS Spreads at Pre-QE Levels, Where is the Value?
Bloomberg reported on Monday that since the European Central Bank started its Corporate Sector Purchase Program (CSPP) in June 2016, it has purchased €177bn of investment grade rated corporate bonds. Initially, as expected, spreads tightened rapidly, but since the first quarter of 2018, they have been gradually widening back out to pre-CSPP levels.
Difficult Markets, But a Time of Plenty for Stock Pickers
It is that time of year when we traditionally look ahead to the new year and make predictions on the performance of various asset classes, sectors and industries.
Evidence of Tightening in Italy
We have been discussing for a while what the quantifiable impacts of Italy’s populist government have been for the country’s economy.
A (Measured) Buying Opportunity in Credit
There were sharp declines across global risk assets on Tuesday, led by tech stocks but with barely an asset class left unscathed.
Is High Yield Weakness a Risk to CLOs?
On Monday my colleagues on TwentyFour’s Multi-Sector Bond desk published a blog on rising default risks in high yield credit. Dummen Orange, Douglas, Boparan, Moby, Galapagos and CMC Ravenna are some of the obvious under-pressure names held in loan funds and CLO portfolios that are trading at a significant discount in the market.
Gauging the Pain Threshold
A quick look at the dashboard of 16 fixed income indices I track clearly shows the amount of pain experienced by investors so far this year. Of the 16 indices I follow, which include IG corporates, government bonds and high yield all denominated in sterling, euros and dollars, Bank CoCos, £ and € Sub Insurance, three hard currency corporate EM indices and the G7 govvie index, only two had a positive total return for the year at the end of October.
High Yield Default Risks Rising
Fixed income managers never like to start their week reading headlines about potential defaults in the high yield sector, but sadly this has been one of those Mondays.
STS: Feel the Squeeze
Changes in regulations are typically long and drawn out, but their impact can often be felt quite quickly. There is every chance that this could soon be the case in ABS markets.
Italian Banks - What Do The Earnings Tell Us?
After some very negative research pieces – some almost sensationally so – on the affect the wider Italian Government Bond (BTP) spreads would have on Italian banks, yesterday we got to see the facts from Intesa Sanpaolo when it reported its Q3 earnings.
Big Few Days For Europe’s Banks
As expected, the EBA 2018 stress tests, which were widely reported on yesterday did not have much of an impact on markets generally, although it’s worth looking at some of the stresses.
Is there a case for Italian RMBS?
At TwentyFour our Italian ABS holdings are fairly moderate, and in general our peripheral ABS exposure has been steadily decreasing for some time. This has nothing to do with credit quality, but everything to do with relative value.