‘Temporary Inflation’: Making head or tails of it

The Fed.’s Narrative The use of the term ‘temporary inflation’ put forward by the Federal Reserve (the Fed.) is an oxymoron. Inflation (better known as currency debasement) has accompanied mankind for centuries (see ancient Coin clipping). It is sometimes overwhelming, sometimes subdued and may go into reverse (this is called deflation). The choice of this […]

‘Financial Oddity’ of Raising US Rates…

Introduction to Market noise Over the last few months, the financial market conversation has been around the reflation trade. This was nourished by a pick up in economic activity and a rise in inflation expectations, which, in turn, have been driving long term US interest rates higher. In addition, massive deficits in the United States […]

ESG Bonds

Introduction An ESG Fixed Income instrument is a special type of bond, specifically created to fund the new ‘green’ social agenda. The issuance of these environmental, social and governance (ESG) bonds is growing exponentially throughout fixed income markets carried by a rising investor demand for these instruments. The declared objective is to bring an ethical […]

Big US Banks

Introduction Some large US banks posted better-than-expected results in the third quarter of 2020. These figures were fueled by exceptional profits from their financial market activities on the one hand and by a reduction in provisions for non-performing loans on the other. Beyond these accounting adjustments, these entities have had the opportunity to build up […]

The Corona Crisis and its Impact on Bond Markets

A brief analysis of recent events For several weeks now, world bond markets have been in turmoil. As economic activity closes down around the world (an event never seen to this extent in the history of mankind), the ensuing disruption has been at the heart of the operational malfunction in this investment space. During this […]

Is There a Possibility of a Melt-Up Scenario in American Asset Markets?

You can find this article on Funds Society Website. Introduction In an article published in March 2019, we described the possibility of a melt-up scenario if world central banks were to have a heavy hand on their asset purchases and liquidity injections. A melt-up could be characterized by too much liquidity chasing too few investable assets, thereby […]

Taking a Peep Into 2020

Introduction As a new decade looms ahead, let us take a peep into 2020 based on the trends observed over the last 18 months. The strong performance in bond and equity markets of 2019 have wiped away the sorry tale of investment markets just a year before. Much of this turn around can be attributed […]

Asomarse a 2020

Introducción Se avecina una nueva década y es momento de que nos asomemos a 2020, basándonos en las tendencias observadas durante los últimos 18 meses. El sólido rendimiento de los mercados de bonos y acciones en 2019 ha acabado con la triste historia de los mercados de inversión de hace un año. Gran parte de […]