• RT @bondvigilantes: We are looking for an Emerging Markets Financials fixed income analyst to join the M&G Prudential bond team. Read al…
    Bond Vigilantes Thu 04 Apr 2019 10:29
  • We’re moving offices into the brand new M&G Prudential global HQ near Leadenhall Market next week. Means we say goo… Link
    Bond Vigilantes Thu 04 Apr 2019 10:19

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  • New post: The changing nature of market liquidity – understanding banks’ corporate bond inventory Link
    Bond Vigilantes Thu 04 Apr 2019 09:14

    When looking at the risk premium embedded in the extra return you receive in owning corporate debt versus “risk free” governments, one of the factors that we have to take into account is the less liquid nature of corporate bonds. This adds to the potential risk premium from a liquidity and transaction cost perspective. A constant theme since the financial crisis has been the belief that the crash removed the abundant liquidity of the corporate bond market, and therefore corporate spreads should now be intrinsically wider.

    The first chart below shows the annual moving average of dealer inventory from 2006 to date, this peaked near $200 billion and has collapsed towards $20 billion, a 90 percent drawdown in committed capital. By definition, this does not sound good for liquidity and corporate bond risk premiums.

    The second chart shows actual dealer volume over the same period. This has roughly doubled from peak to trough from circa $12.5 billion to $25...

  • Remember that this is still a tax free, risk free yield of (currently) just over 1.9%, which is difficult to find e… Link
    Bond Vigilantes Wed 03 Apr 2019 09:23

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  • We are looking for an Emerging Markets Financials fixed income analyst to join the M&G Prudential bond team. Rea… Link
    Bond Vigilantes Wed 03 Apr 2019 09:18

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  • RT @Trinhnomics: Stats of the day: Did you know that China has more outstanding credit card balances than the US as a % share of GDP, as i…
    Bond Vigilantes Wed 03 Apr 2019 08:23
  • RT @tomashirstecon: I have eaten the food stockpile that was in the basement and which you were probably saving for Brexit Forgive me it…
    Bond Vigilantes Mon 01 Apr 2019 11:16
  • RT @aliceemross: This is clever as it effectively prevents all the other parties from telling people to vote for change in their slogans. h…
    Bond Vigilantes Fri 29 Mar 2019 11:23
  • New post - Eskom, Pemex: two distinct stories but a similar root of problem Link
    Bond Vigilantes Thu 28 Mar 2019 12:37

    Fully government-owned corporate bond issuers (or quasi sovereigns) are one of the most interesting areas of emerging market debt investing, due to the hybrid nature of their credit risk: partly corporate credit, partly sovereign risk. Venezuela’s national oil company PDVSA is an example of what can go wrong, as it is in default. Bond investors are therefore currently spending more time looking at Pemex and Eskom, in order to assess whether they could follow a similar path in the future.

    As Mexico’s national oil company, Pemex is strategically important for the country. Oil revenues contribute to approximately 20% of Mexico’s budget and Pemex is one of the largest employers in the country. Due to a lack of investment in its upstream segment for years, oil production has been heading south at a significant pace; cash flows have suffered from the lower oil price since 2014 and a substantial tax rate (as the company is the cash cow of Mexico’s budget). Meanwhile, Pemex...

  • https://t.co/9Sn6enx0fc
    Bond Vigilantes Wed 27 Mar 2019 15:26
  • -0.08% (Germany) vs -0.07% (Japan)
    Bond Vigilantes Wed 27 Mar 2019 15:26
  • *10 year bund is trading with a lower yield than the 10 year JGB*
    Bond Vigilantes Wed 27 Mar 2019 15:26
  • Looks like it's time to add Soy Bean futures (S 1 Comdty) to my Bloomberg launchpad. Putting it next to Baltic Dry… Link
    Bond Vigilantes Wed 27 Mar 2019 10:46

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  • RT @NaomiOhReally: Fascinating! The richest regions in Europe 1900-2010 by GDP, by @jburnmurdoch https://t.co/5jyhFo3nbK
    Bond Vigilantes Wed 20 Mar 2019 10:09
  • New post: Despite Brexit, Sterling credit holds up with a surprise front runner Link
    Bond Vigilantes Wed 20 Mar 2019 09:49

    With Brexit in every headline, it’s hard not to form an opinion on the possible outcome for the UK. Investors are getting increasingly edgy about the impact on certain asset classes, and I have read many articles predicting which sectors will do well in various exit scenarios. Sterling credit has remained healthy since the referendum, led by robust fundamentals and not by politics as the pound has been.

    The sterling credit universe (as defined by the iBoxx £ Corporate Bond Index) is largely an internationally influenced index, much more correlated with what is going on in Europe and the US than in the UK domestically. Of the top ten issuers, only two have their full working operations within the UK (namely Heathrow Airport and Thames Water), while the top issuer by index weight (3.3%) is French utility company, EDF. Which just goes to show the international nature of the index – and indeed perhaps some of the reason it has proven to be robust, with only 49.8%...

  • Benin is coming with a €500mn (c.5% of its GDP) bond deal today, rated B+/B, around 6.125% yield. Our new EM sover… Link
    Bond Vigilantes Tue 19 Mar 2019 14:23

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  • New post: Should investors care about GDP data revisions in emerging markets? A Benin case study… Link
    Bond Vigilantes Tue 19 Mar 2019 10:03

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  • RT @lisaabramowicz1: Deutsche Bank's Tier 1 debt is surging as traders expect the German government to help with some capital infusion. htt…
    Bond Vigilantes Mon 18 Mar 2019 16:02
  • New post: Bond indices are shifting their attention to China – so should you Link
    Bond Vigilantes Mon 18 Mar 2019 15:57

    It is widely recognized that China is globally well-integrated from a trade perspective (it accounted for 13% of total world exports in 2017 according to the WTO). Yet in comparison, its financial markets remain in relative isolation. Indeed, despite having the 2nd largest equity and 3rd largest bond markets in the world (currently around $13 trillion), foreign participation in these markets remains extremely low: China still scores below India in terms of foreign participation in its equity and bond markets according to the IMF.

    The situation is changing however, and China’s domestic financial markets are slowly beginning to open. This became apparent in 2011, when the renminbi Qualified Foreign Institutional Investor Scheme (RQFII) was introduced. The program allowed qualified investors to access directly the China Interbank Bond Markets (CIBM), where previously relatively strict quotas were in place. More recently, the creation of the Bond Connect (northbound...

  • RT @ColmHand: A float of an ATM been removed from a bank using a digger is a highlight in the Cavan parade #StPatricksDay https://t.co/Iabm…
    Bond Vigilantes Mon 18 Mar 2019 08:07
  • Japan's "Shunto" wage round data (first estimate) is out. Average wages up 2.16% annually (versus a rise of 2.07%… Link
    Bond Vigilantes Fri 15 Mar 2019 10:29

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  • RT @ChrisGiles_: Accuracy of economists’ forecasts edition. Economists for Brexit (aka Economists for Free Trade) way too optimistic - ot…
    Bond Vigilantes Fri 15 Mar 2019 09:44
  • I just put a 2s/10s inversion in the UST curve through the software and it just generated a link to this: Link
    Bond Vigilantes Fri 15 Mar 2019 09:29
  • RT @equitiesforum: The term #Impact investing often gets confused with #ESG and other forms of #responsible investing. Véronique Chapplow,…
    Bond Vigilantes Fri 15 Mar 2019 09:09
  • It gets madder and madder. By 6 minutes he's adding whooshing sound effects for the 1980 yield curve.
    Bond Vigilantes Fri 15 Mar 2019 08:44
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