One of the common problems being a macro strategist is being accused of cherry-picking data to fit whatever narrative one is conveying at the time. Over the past two years, those with more negative view of the U.S. economy pointed to the depressing figures out of the industrial and cyclical sectors, while those with moreContinueContinue reading “All The Data in the World: Potential Recovery in Industrial Sector Amid Slowdown in Consumer Spending”
Tag Archives: bonds
The Landing: View from the Cockpit
Two years ago, when inflation started to accelerate across the developed world and central banks were expected to hike policy rates, global macro strategists saw dark clouds on the horizon that the global economy will have to pass through. The last time inflation went out of control was in the late 1970’s, which coincided withContinueContinue reading “The Landing: View from the Cockpit”
Chinese and Asian High Yield Corporate Bonds: Feeling the Heat
The jitter surrounding Evergrande’s solvency problem has spread to other Chinese property developers that account for sizeable portion of Chinese and Asian High Yield Corporate index. Chart 1 and 2 show spreads of Chinese and Asian USD bonds have widened to 16% and 11.5%, respectively, while the total return index declined 18% and 12% fromContinueContinue reading “Chinese and Asian High Yield Corporate Bonds: Feeling the Heat”
February 2021: EM Bonds, Brazil and Turkey
Download PDF: monthly_202002Download EM local-currency bonds EM bonds still have room for spread tightening against U.S. Treasury. The 10-year Treasury yield will have difficulty to break 1.2% level as the Fed is unlikely to raise rate until inflation overshoot its 2% target, creating an anchor for yields globally to remain low. Moreover, the relatively modestContinueContinue reading “February 2021: EM Bonds, Brazil and Turkey”
Global Themes 2021: China, U.S., and Emerging Markets
Download PDF: monthly_202011Download This year, the coronavirus and lockdown restriction enforced globally have driven the financial market at large, far outweighing the impacts from U.S.-China escalating geopolitical rivalry, war in the Caucasus, and U.S. Presidential Election. These themes are likely to continue in 2021 and already some of its effects lingered permanently, as discussed below.ContinueContinue reading “Global Themes 2021: China, U.S., and Emerging Markets”
South Africa: Is The Worst Yet To Come?
Download PDF: south_africa_202010Download South African government fiscal situation turned from bad to worse this year amid a shortfall in tax revenue and increase in spending to support growth (Chart 1). The government’s revision to its budget in June mainly reflects a shifting of its spending, i.e. delaying projects to 2021/2022 or beyond while prioritizing fundsContinueContinue reading “South Africa: Is The Worst Yet To Come?”
Structural Tailwinds for EM Sovereign Bonds and EM Stocks Uneven Recovery
Download PDF: monthly_202009Download Structural Tailwinds for EM Sovereign Bonds EM sovereigns are currently the only high-yielding asset class in the fixed income space, at a rate slightly above 4% – much above U.S. corporate and Treasury yield. This year crisis and massive QE program conducted by the Fed have brought U.S. Treasury yields close toContinueContinue reading “Structural Tailwinds for EM Sovereign Bonds and EM Stocks Uneven Recovery”
Taking A Pulse on EM Recovery
Download PDF: taking-a-pulse-on-em-recoveryDownload The current economic situation in majority of EM countries is still very bleak amid various lockdown measures, but the worst has likely passed as economic activity continue to recover in most countries (Chart 1). There are signs that even in the worst-hit EM countries, measured by number of deaths per hundred thousandContinueContinue reading “Taking A Pulse on EM Recovery”
Checking the Pulse on Global Economy: Strategy for 2020
Download PDF: monthly_201912 Risk aversion has come down of late, as highlighted by the rebound in real yield from a deep negative level in G7 economies ex-Italy. The improving global outlook despite apparent weakness in credit Chinese data, however, is concerning. The less forceful and diminishing stimulus administered by the Chinese government in the lastContinueContinue reading “Checking the Pulse on Global Economy: Strategy for 2020”
An Overview of Russia: Oil, External Risk and The Banking Sector
Download PDF: The Linkage between Oil Price and The Russian Economy There is little sign that Russian economy is diversifying from energy production and exports in the last 20 years. The direct link and trickle-down effect of higher/lower oil prices to the economy result in an economy that is highly correlated with the global economicContinueContinue reading “An Overview of Russia: Oil, External Risk and The Banking Sector”
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