The TwentyFour Blog

Yesterday was an eventful day for markets. We started off with inflation data in Europe, followed by an earnings release by New York Community Bank that showed large provisions in their commercial real estate loan book, before moving onto the Fed’s Federal Open Market Committee meeting

With most central banks presumably at highs in terms of monetary policy rates during the current cycle, the focus has rightly shifted to the timing of the first cut. 

The direction of monetary policy rates going forward is more clear, following the Federal Reserve's release of its new summary of economic projections and the dovish remarks of Jerome Powell.

After a horrible year for financial markets in 2022, the macro-outlook for 2023 had a lot of consensus views, with most predicting a much better year ahead, helped by supportive rate cuts from central banks and positive returns from both government bonds and credit.  

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

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. 

The last few weeks has seen a sharp move up in long dated Treasuries, since the week of the FOMC meeting in September the US 10 year has moved up 45bp to 4.75% with a brief flirt with 4.90% in the meantime

Eoin Walsh shares his thoughts following last night's statement from the Federal Reserve, concluding that for now while treasury yields aren’t helping, credit looks attractive based on the rosy economic forecasts.

Felipe Villarroel takes a look at what progress, if any, has been made in the labour market and how this resonates with the Fed's projection of labour markets easing while not experiencing a major disruption.

As governments around the world provided support in various manners during the pandemic, savings ratios increased to levels that were twice as large as the previous all time highs in some countries. Felipe Villarroel takes a look at some countries' spending vs savings monthly data patterns and lays out what he thinks this means for fixed income investors.

Bank bonds have been amongst the best performing asset classes in fixed income over the last few months, doing their bit in proving their strength.

Felipe Villarroel looks at the preliminary numbers for July PMI Manufacturing and PMI Services data, and how from a markets point of view, he thinks volatility will remain in place while both rates and spreads should trade in a range as we await for more clarity on whether inflation will allow Central Banks to pause and the extent of the slowdown in H2, particularly considering August is looming.