Category Archives: Capital Markets

Hunt for yield pushes more investors into riskier assets

Pension funds and insurance companies have increasingly embraced riskier assets in their hunt for higher returns over the past five years. Alternative assets such as property, infrastructure, private equity and hedge funds have been bought up by institutional investors in a world where yields on safer government bonds have hit rock bottom. Total assets managed by the 100 largest alternative…

Italian 10-year bond yields slip below 2%

Italian government debt is rallying strongly today with 10-year yields falling below 2 per cent for the first time in a week, helped along by reports the European Central Bank could ramp up its purchases of the country’s bonds ahead of a crucial referendum on Sunday. Yields on Italy’s benchmark 10-year bonds are down 0.07 percentage points (7 basis points)…

UK inflation debt sale attracts robust demand

A sale of UK index-linked bonds attracted more than £10bn in orders on Tuesday, in a fresh sign of demand for securities that offer some protection against rising consumer prices after years of subdued inflation. It comes as investors assess competing forces affecting the UK economy following a vote to leave the EU in June. Expectations of economic growth fading…

Mario Draghi’s difficult juggling act

The calendar is not kind to the European Central Bank. A week on Thursday, its governing council will deliberate, just days after Italy’s vote on constitutional reform, and a week before the bank’s US counterpart holds a meeting which could move the world’s bond and currency markets. Temporal pressure of another kind is also building, as the ECB buys €80bn…

Russia’s rehabilitation trade prompts delight and scepticism

There is no mistaking the delight with which investors in Russia regard Donald Trump’s ascension to US presidency. And after more than two years near the top of the list of countries to avoid, international equity and bond traders are placing bets Mr Trump’s victory will not just improve ties between the historic adversaries, but facilitate Russia’s rehabilitation on the…

More than $5.1bn flow into US stock funds

US stock funds continue to pull in investor’s cash after the US election, as Donald Trump’s rhetoric over renewed growth for the economy shows no sign of abating. Just over $5.1bn flowed into US stock funds for the week ending November 23, according to data from EPFR. It was a lighter intake than the previous record-setting week, but still accentuated…

Mexico, post-Trump treasure of the Sierra Madre

The glittering treasure you are hunting for day and night lies buried on the other side of that hill yonder. The Treasure of the Sierra MadreB Traven “There are definitely a lot of people trying to figure the [relative value] in a Trump world,” one Wall Street bond investor recently told me following the election of Donald Trump as US…

Saudi Arabia on the verge of $30bn capital injection

Saudi Arabia is hardly an emerging market success story at the moment, with a bout of austerity driven by low oil prices resulting in public sector pay cuts and a slump in non-oil growth to 0.07 per cent in the second quarter of 2016, putting the country on the brink for its first non-oil recession in 30 years. Yet Saudi…

Bond fund managers help limit clients’ post-election losses

Managers of the largest US bond funds have helped limit the damage to their clients’ savings from the post-election market rout, in a rare — albeit limited — piece of good news for advocates of active management. Nine of the top 10 largest “core” bond funds, which are designed to be the linchpin of a saver’s fixed-income holdings, outperformed the…

Hopes flicker of a central bank fix for eurozone funding market

Hopes of a fix to the collateral squeeze facing the eurozone’s €5tn short-term funding markets were boosted this week after reports emerged the European Central Bank will consider ways to ease rules on how it lends its stockpile of sovereign debt. A lack of good quality collateral, which market participants use to secure loans, has crippled the single currency area’s…