The TwentyFour Blog

Despite concerns about a maturity wall, Chris Holman explains how research shows the high yield maturity profile in the US is less concerning. Overall, a focus on higher-rated bonds suggests a relatively healthy outlook for the primary market and a default rate in line with historical averages.

As earnings season ends, we take stock of the latest US results and what it tells us about the health of corporates, the consumer, and the outlook for the broader economy.

UBS came to the market yesterday with a two-tranche $ additional tier 1 transaction, which was highly anticipated and didn’t disappoint.

Following yesterday’s publication of the quarterly Senior Loan Officer Opinion Survey (SLOOs) by the Fed, it revealed how lending conditions have evolved over the quarter amongst US banks.

George Curtis breaks down the latest developments following this week’s Quarterly Refunding Announcement and the Treasury Borrowing Advisory Committee update.

Whilst bank debt has recovered from the contagion of the US regional banking crisis and the Credit Suisse write down event earlier this year, many bonds are still trading wider than they were at the beginning of the year.

Yesterday, market participants received two important reports about the state of the economy in the Eurozone. Firstly, the October Markit PMI – Purchasing Managers’ Index - reports showed a continued deterioration in growth in the manufacturing as well as the services sector.

Thomas Barkin, President of the Richmond Fed, called any (potential) upcoming recession "the most predicted recession ever".

This morning the ONS published its monthly update on the UK labour market. Of all the G7 countries, the UK has had the most puzzling labour market dynamics post pandemic, as we discussed in a previous blog.

Fixed income investors have gone through a stressful few weeks. Since the beginning of September, government bond yields have moved sharply higher, causing spreads to widen and returns to worsen across the board. 

Since the last Federal Open Market Committee rate decision on September 20, rates markets have sold off very aggressively. And, despite rates being left on hold, the hawkish message, which included the possibility of another hike this year and less cuts next year than previously forecast, was one of the key contributing factors behind the ~55bps increase in the 10-year treasury in the 10 days following that meeting.

As we commence upon earnings season, we will be paying close attention to another round of updates from the US regional banks, particularly within the context of a “higher-for-longer” rate environment. With wider adoption of a soft-landing view, as well as a higher treasury yield backdrop, we explore what implications this has for the US regional banks.