Sacrificing liquidity in return for additional yield can be attractive if the compensation is sufficient and the time horizon of capital is appropriate. But corporate bond markets are currently not providing sufficient compensation for growing illiquidity risk. Show More
In Australia, many cities have enjoyed a prolonged period of house price increases. As a result, it's safe to say a large number of Australians have fallen in love with residential investment property as an asset class. Show More
So far in 2018, markets have grappled with rising bond yields, full employment, US Federal Reserve tightening, a weak USD currency and rising fiscal deficits, spurred by tax reform. We have seen these exact issues before. The year was 1987. Show More
In our new 'Christmas Cracker' series, each morning through to Christmas we will bring you a top insight for 2018 from one of our contributors. Today’s insight is by Vimal Gor, BT Investment Management. Show More
20th October 1987 probably doesn’t mean a lot to anyone who wasn’t in the market – but for those who were - it was a day no one ever forgets... Show More
China’s central bank balance sheet is the biggest central bank balance sheet in the global economy, and has been for several years. That reflects China’s two bouts of QE over the past 10 years. Initially China carried out a type of QE we label ‘FX QE’, i.e. from 2009 through... Show More
Liquidity continues to be an ongoing concern for fixed income participants and market regulators globally. Recent high profile failures of funds run by Third Avenue Management, Stone Lion Capital Partners and Lucidus Capital Partners sparked somewhat of a panic, at least in credit markets. The main cause of these failures... Show More
With Greece and China resolved for the time being, investors have quickly transitioned from macro concerns to earnings season and the results in the US and Europe so far have been quite constructive. However, the action in the gold market last night was interesting. Some attributed the bullion price decline... Show More
Bill Gross in his latest investment outlook warns that “While Dodd Frank legislation has made actual banks less risky, their risks have really just been transferred to somewhere else in the system.” Gross specifically points to the new "Shadow Banks" - Mutual Funds and ETFs - saying “While private equity... Show More
"Since 2008, high yield debt has gone from $300 billion to $900 billion. This is but one side effect of QE which has forced sovereign bond yields into negative real territory and sent yield hungry investors into the high yield market. While investors, mutual funds in particular, have been scrambling... Show More
Bloomberg reports “It has been a busy period in markets across the globe, with trends (and trades) breaking down everywhere.” 1) the USD is weakening. 2) Euro sovereign debt is plunging, causing yields to rise. 3) “Asian stocks, which have been in a bull market for years, have been feeling... Show More
Mohamed E-Erian says once the Fed begins the tightening cycle they will “work hard to convince the markets that the pace of subsequent hikes will be slow, hesitant and subject to course correction. However El-Erian warns… “A tightening policy that is too loose could make it difficult to prevent the... Show More
Some form of asset market crisis may shortly emerge again and European bonds are clearly most at risk. European bonds have lurched higher in recent weeks as the European Central Bank 'appeared ready' to begin buying asset backed securities. The 10-year bond in Spain now yields below 2 per cent... Show More