22 Jun 2021 TwentyFour Blog Punch Pubs Sees Off WBS and Shows Route to Bonds All told, while we think relative value in WBS can be attractive, we believe the trend of refinancing in the bond market is only going to continue in the coming years, though it will be gradual. Read more
15 Jun 2021 TwentyFour Blog FOMC: Taper Talk and Treasury Tumble With all of the recent data pointing to higher inflation expectations and the Fed expected to maintain a transitory interpretation, we will be focusing our attention on comments from the various regional Fed presidents on conditions that could prompt a tapering move at some point in the future. Read more
10 Jun 2021 TwentyFour Blog Why Gilts Are More Vulnerable to Inflation Than Treasuries We believe UK government bonds are ultimately most vulnerable to a rise in inflation, and the 10-year Gilt currently trading at 0.73% does not come close to compensating for this. Read more
8 Jun 2021 TwentyFour Blog Credit Fundamentals Set to Improve Further Frustratingly for fixed income investors looking to buy bonds, the data seem to fully justify the high valuations we see in so many parts of our market at the moment; it really would not make sense to be able to buy bonds cheaply when conditions are so good. Read more
7 Jun 2021 TwentyFour Blog Fed Sales a Drop in the Bucket, but Watch the Ripples While we don’t expect any material spread widening in the near term, we remain extremely wary of higher duration bonds given our view that the potential persistent inflation suggested by recent data isn’t priced into US Treasury yields, which currently sit around 1.58% at the 10-year point. Read more
1 Jun 2021 TwentyFour Blog Investors Should Fight Weakened CLO Docs 2021 looks set to become a post-financial crisis record year for European CLO issuance and refinancings, but amid the rush of activity we are seeing a concerning trend for weaker documentation in refinanced deals that in our view investors need to fight against. Read more
28 May 2021 TwentyFour Blog Central Banks Get Ready to Talk Tapering After unleashing the strongest combined emergency package we have ever seen in 2020, central banks are now entering perhaps the most challenging phase of their COVID-19 response, trying to balance the economic recovery while at the same time having to reassure the markets they can control the threat of runaway inflation. Read more
26 May 2021 TwentyFour Blog Your Lufthansa Coupon Has Been Delayed, But Not Cancelled Last week there was a rare occurrence in the high yield market as German airline Lufthansa announced it would be deferring the coupon on a hybrid bond issued in 2015. Read more
25 May 2021 TwentyFour Blog What Does US Wage Data Say About Inflation? From our perspective, the potential wage pressures we see make us uncomfortable with 10-year Treasury yields at current levels, despite their significant rise since the start of the year. Read more
21 May 2021 TwentyFour Blog Reaching For The Risk Dial as Valuations Stretch Having witnessed the most remarkable turnaround in risk markets over the last 14 months, it makes sense to take stock as fundamentals look to us to be approaching optimal levels. Credit spreads have ground into levels not far from the prior cycle’s tights, and while we remain confident in the underlying fundamentals and a good technical backdrop, recent developments mean that despite this constructive view, our risk appetite has ticked down slightly. Read more
14 May 2021 TwentyFour Blog What’s Really Going On With US Jobs? At 8.1m, the number of job openings as of March 31 was the highest it has been since the data series began some 20 years ago. Read more
11 May 2021 TwentyFour Blog Classic Late-cycle Issuance…in Mid-cycle Markets can often be tricky for investors in May as bond issuers take advantage of a window of opportunity following the Q1 earnings season and ahead of the typical summer lull. This often results in heavy supply in late April and early May, hence the old trader adage of “sell in May and go away”. Read more