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Saturday 4 September 2010 |
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Research Centre |
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Fixed Income Monthly Monitor
There are 10 Research Centre articles available in this category. Please select the required article from those listed below:
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Fixed Income Monthly Monitor - May-June 2005
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| Fixed Income Monthly Monitor - May-June 2005
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FIXED INCOME MONTHLY MONITOR APRIL - MAY 2005
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| The recent slowdown in the US economy has fuelled a strong rally in bonds over the past month. However, growth should pick up again over the summer, helped by lower oil prices, declining longer term interest rates and with policy still accommodative. The Treasury market is very vulnerable to any signs of renewed economic strength, as it would cement expectations of rates rising to 4% over the next year. Thus, we look for bond yields to back up again. In the eurozone, growth continues to disappoint. We don’t believe that the ECB will be in a position to hike rates until year end at the earliest. Hence, any setback for the eurozone bond market is likely to be modest.
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FIXED INCOME MONTHLY MONITOR JANUARY FEBRUARY 2005
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| FIXED INCOME MONTHLY MONITOR JANUARY FEBRUARY 2005
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WEEKLY ECONOMIC DIARY
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| WEEKLY ECONOMIC DIARY 4TH - 8TH OCTOBER 2004
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Fixed Income Monthly Monitor September 2004
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| Many central banks have been busy hiking interest rates as they seek to withdraw some of the considerable monetary stimulus that has been injected into the world economy in recent years. They have not been deflected from this path by weakening activity. Central banks believe that the economic slowdown will prove a temporary occurrence and activity will soon pick up again. The short ends of bond markets have not discounted a lot of policy tightening. Thus, they are quite vulnerable if central banks stick to their present tightening path. Yield curves remain relatively steep, offering some protection to longer dated bonds. However, this part of the curve is also sensitive to any deterioration in interest rate expectations. The economic outlook is uncertain. Our best guess is that there will be a modest rise in yields in Q4 2004 on signs of a pick up in global economic activity.
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FIXED INCOME MONTHLY MONITOR JULY/AUGUST 2004
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| As usual, the US Treasury market has been setting the direction for most other bond markets. US yields have fallen significantly in recent weeks, on signs of a slowdown in growth during Q2 and expectations that Fed rates will rise at just a gradual pace. We expect that the economy will pick up momentum again during the second half of the year. We also expect to see a continuation of the build up of inflationary pressures. Thus, while the Fed is likely to deliver another modest 0.25% rate hike in August, it could turn more aggressive on policy tightening post the November elections. Hence, we expect upward pressure to re-emerge on bond yields through the autumn and winter.
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FIXED INCOME MONTHLY MONITOR APRIL 2004
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| The ECB is likely to stay on hold this year but a summer rate cut cannot be ruled out. Further rate hikes are anticipated in the UK. In the US, employment is picking up, the economy is growing strongly and inflation is accelerating. Thus, we expect the Fed to start hiking rates in August. By end year, the funds rate is expected to have risen to 2.25%. Hence, we see further upward pressure on global bond yields, with ten year Treasury yields hitting 5% by end 2004.
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Fixed Income Monthly (March 2004)
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| The unexpected weakness of payroll data means that the Fed is unlikely to hike rates until near the end of the year. We still expect payrolls to pick up strength over the course of 2004. In these circumstances, upward pressure on bond yields is likely to re-emerge as the year progresses.
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Fixed Income Monthly Monitor (Feb 2004)
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| The US bond market has performed well recently, helped by the continuing very low level of official interest rates. Our view remains that payroll growth will strengthen in the coming months as the economy continues to grow robustly. We expect that this will trigger Fed tightening in H2 2004 of the order of 125bps, well above consensus forecasts. Hence, we see ten year US yields rising from 4% at present to 5% by end 2004. Other bond markets can be expected to follow suit.
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Fixed Income Monthly Monitor
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| We expect US employment data to have a major bearing on US interest rate policy over 2004. Leading US employment indicators point to a marked strengthening of payrolls growth in the coming months. We expect this will see the Fed tighten policy from the summer onwards. We look for the funds rate to rise from 1% to 2.25% by end year, well above consensus forecasts. We do not expect the ECB to tighten rates until Q4. Even then tightening should be modest.
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