The Tipping Point

federal reserve
by Swiss Financial Consulting         It has been suggested that a 3% yield on ten-year US Treasury bonds (10s) is a sort of magic number that indicates that one should start shifting from stocks to bonds. Opinions vary from 2.85% up to 5% as to what the percentage should be, but one thing is clear. The higher bond yields rise, the more the shift from equities to fixed income will become pronounced....

Agli investitori conviene investire sui Treasury?

Stati Uniti, Usa
Di Wolfgang Bauer, gestore M&G (Lux) Absolute Return Bond Fund di M&G Investments With the notable exception of the upcoming royal wedding, it would be pretty difficult to find a topic that is currently more over-analysed than the flattening of the US Treasury yield curve. On this blog as well we have pondered potential implications for credit valuations and possible counter-measures the Fed...

Yield Curve Shape and Recessions

Di Mark Holman, CEO di TwentyFour AM The rapidly flattening US Treasury yield curve is prompting a lot of questions about the shape of the curve and it being a good predictor of upcoming recession. We have also had a lot of questions about the steepness of the very front end of the US curve between overnight swap spreads and 3 month libor, and whether this steepness is of concern, as it was during...

Stocks Down, Bonds Up

A cura di Walter Snyder, Swiss Financial Consulting This Newsletter advised against investing in bonds because the interest rates were simply too low. The risk was too high that the price of the bond would fall as soon as higher interest rates would come. What has happened is that the Fed has raised interest rates to the point where investors can get 2.87% on ten-year Treasuries and 2.49% on two-year...

The 3 percent yield that really matters

forex, grafico
by Richard Turnill, BlackRock’s Global Chief Investment Strategist Rock-bottom short-term interest rates over the past decade have driven income-hungry investors to riskier assets in search of higher yields. The chart above shows that yields on short-term IG corporate bonds have mostly languished below 2% since 2010 while two-year Treasury yields have hobbled below 1%. Yields on both have increased...

Oil and Recession

A cura di Walter Snyder, Swiss Financial Consulting Sometimes there are swift changes in the economy, and we are currently witnessing an era of ever more rapid transition. Even so oil remains the main energy source for the global economy, and the price of oil has risen. The black gold now costs  US$ 70 as opposed to US$ 50 a year ago for the benchmark WTI. Of course there are 143 different grades...

Us Dollar vs Ruble

cash liquidita soldi dollari
A cura di Walter Snyder, Swiss Financial Consulting The US is waging economic war against Russia, and a real war was narrowly avoided as the US was careful not to strike Russian installations in Syria in the most recent strike.  On 12th April 2018 the US together with France and the UK shot 105 missiles against Syria as a warning to the Syrian government for allegedly using chemical weapons. The American...

Tariffs and Trade Deficits

dollaro
A cura di Walter Snyder, Swiss Financial Consulting The US trade deficit in February 2018 increased to US$ 57.6 billion according to the Commerce Department.  The US trade gap in 2017 was US$ 566 billion. Economic logic would entail a tail spin for the US dollar, which has not taken place thanks to the dominant position of the greenback as the world`s primary reserve currency. Several market observers...

The return of volatility on the financial markets

A cura di Banque de Luxemburg Investments Volatility has returned to the financial markets. Three subjects which are currently bothering the financial markets (apart from the declarations and decisions of the American president) merit exploring in greater detail: growth, inflation and the Federal Reserve’s monetary policy, as well as the repercussions that some of the potential scenarios could have...

About Usd/Cny

yuan renminbi
A cura di Walter Snyder, Swiss Financial Consulting The opening of the Shanghai oil futures Exchange on 26th March 2018 has been commented on by various market observers. Some think that US dollar dominance in global finance will continue for a long time while others hail the beginning of the end of the petrodollar. It is clear that the US dollar is not going to be replaced immediately by the renminbi...

Volatility is back !

A cura di Prasaanna Jeyanandhan, Senior Analyst SYZ Asset Management After an extended period of calm and buoyant markets, February was a bit of a wake up call to investors as markets sold off and volatility surged to levels not seen since crisis times. This spike in volatility, coming during a so-called “Goldilocks” period of strong growth and modest inflation, caught many investors off-guard...

Pimco: “The Ide(a)s of March”

asset allocation
Joachim Fels, PIMCO Global Strategic Advisor Is President Trump about to start a major trade war? Will goldilocks give way to a more challenging late-cycle mix of slowing global growth and rising inflation? Is the untested Powell-Fed about to step up the pace of rate hikes? Could the neutral rate of interest r* be heading higher? Will Emerging Markets continue to shine? Are we now in a bear market...

Trump and US Avoid Bankruptcy

A cura di Walter Snyder, Swiss Financial Consulting US President Donald Trump has experience with bankruptcy and finding financing to make a recovery. This will stand him in good stead as the financial situation of the federal government worsens. As the US dollar is the major global reserve currency, it is imperative for the US to avoid defaulting. The budget deficits foreseen for the next two or three...

The Perfect Debt Storm

A cura di Walter Snyder, Swiss Financial Consulting Congress has voted to spend 300 billion more. Adding this to the projected budget deficit, the Treasury is going to have to find about one trillion more to finance expenses. With the debt already at 20.6 trillion (www.usdebtclock.org), FY 2018 does not look very promising. If the Fed continues with QT (quantitative tightening) and goes ahead with...

Le implicazioni sui mercati della recente volatilità

A cura di Dan Ivascyn e Scott Mather, CIO globale e CIO U.S. core strategies di PIMCO Volatility in perspective. The backdrop for the spike in volatility is more cyclical than secular in nature and unique to this business cycle. The main point to consider is that we are, finally, returning to normal levels of volatility. The U.S. economy is running close to capacity, and we are seeing a historically...