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Today’s markets move fast. To keep you up to speed each week, Andrzej Skiba, CFA, Head of BlueBay U.S. Fixed Income at RBC Global Asset Management, and members of his investment team will deliver forward looking market commentary and insights into what’s driving fixed income markets over the coming week.
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In this week’s episode of The Weekly Fix, Stephen Fitzsimmons, Institutional PortfolioManager on the BlueBay U.S. Fixed Income team, discusses how risk assets andrates were bolstered by the latest release of inflation data.
In this episode of The Weekly Fix, Tim Leary, Senior Portfolio Manager on the BlueBay U.S. Fixed Income Team, discusses how disappointing CPI data have pushed yields higher so far this year, while lack of new supply has squeezed the market.
In this episode of The Weekly Fix, Stephen Fitzsimmons, Institutional Portfolio Manager on the BlueBay U.S. Fixed Income Team, discusses how different data readings over the past week moved markets, as investors seek clues to future Fed moves.
In the latest episode of The Weekly Fix, hear from Andrzej Skiba, Head of BlueBay U.S. Fixed Income at RBC GAM, on why this week’s FOMC meeting will likely see the Fed on hold, and what investors can expect if the April CPI Core released mid-month lets us down again and the “higher for longer” narrative takes hold.
Corporate earnings may be in focus this week, but macro questions continue to weigh on bond markets. Tim Leary, Senior Portfolio Manager on the BlueBay U.S. Fixed Income Team, shares his insights in this episode of The Weekly Fix.
In this episode of The Weekly Fix, Stephen Fitzsimmons, BlueBay Institutional Portfolio Manager, discusses how the reality of the data shows there is no evidence that the US economy needs lower rates any time soon.
Have prospects for strong fixed income returns this year been diminished by robust U.S economic data? Listen in as Andrzej Skiba, BlueBay Head of U.S. Fixed Income, discusses why this week’s release of CPI data will give us insight into the future decision making of the Fed.
Tim Leary, Senior Portfolio Manager on the BlueBay U.S. Fixed Income team discusses how the strong but not too strong economic conditions have led to a positive environment for fixed income markets.Key points:Broadly speaking, the underlying technicals are very positive for corporate credit.Idiosyncratic risk in a few areas of the market have generated volatility.We experienced a higher default rate in March, but our view is that defaults will remain benign this year & trend upward next year.
BlueBay Institutional Portfolio Manager Stephen Fitzsimmons discusses how investors are eagerly buying up new debt issuance. While many investors appreciated the dovish commentary last week, not all data are cooperating. The past months have certainly been a sustained busy period for the new issue market.Strong investor demand has helped drive credit spreads tighter.Chairman Powell was decidedly dovish at the FOMC last week… driving yields lower.The economic calendar is full this week and investors markets are bracing for the latest inflation measures.
Stephen Fitzsimmons, Institutional Portfolio Manager on the BlueBay U.S. Fixed Income team discusses how investors were largely disappointed with the recent CPI reading, what we’re looking for in some key economic data releases this week, and how it might affect our positioning. CPI came in hotter than market participants hoped and this drove yields higher across the US Treasury curve.The shape of the yield curve indicates that markets expect an economic slowdown, which is not our imminent base-case.Economic data in the US is doing little to show signs of slowing.We continue to expect that rate cuts will likely be later and potentially fewer than others may be pricing in.
BlueBay Head of US Fixed Income Andrzej Skiba discusses why investors will have to wait for additional evidence regarding a moderating inflation trend before the Fed acts to cut rates. Strong growth, labor markets and inflation running hot are not a combination desired by the Fed.In terms of jobs, growth remained robust, but we’ve added fewer jobs than expected.Inflation remains sticky, with February readings staying higher, following up January’s strong data.We do expect a slowdown to manifest itself and that should help inflation to moderate.
BlueBay Senior Portfolio Manager Tim Leary discusses the factors that have led to higher yields this year and why we’re looking for the market to keep grinding.Key points:Spreads may be tighter, but yields are higher on the year.This may peak investor interest and we have seen high fund flows.This is likely a function of the market coming back towards the Fed’s path.
BlueBay Institutional Portfolio Manager discusses what we’re looking for in some key economic data releases this week and how it might affect our positioning. It’s a busy week on the economic calendar.Signs that the economy is doing better than expected may push rate cuts out further in the future.We’re paying special attention to the release of the Producer Consumption Expenditures (PCE) price index to gauge lingering inflation.
BlueBay Head of US Fixed Income Andrzej Skiba discusses how investors are dealing with recent trouble spots within the US commercial real estate issues and how we’re dealing with the turbulence. In our judgement, US commercial real estate (CRE) will be a source of negative headlines in 2024. Several banks across the globe with significant US CRE exposure have reported increased provisioning.Larger banks (>$150B in assets) have been quick to address the deterioration with collateral revaluations and establishing loss reserves where appropriate.Periods of dislocation are ripe with opportunities, however careful credit selection is of paramount importance.
BlueBay Head of US Fixed Income Andrzej Skiba discusses how investors are dealing with strong macro-economic data and heavy treasury issuance.The US economy continues to turn out strong results.It remains to be seen if softer data paves the way for rate cuts later in the year.The market continues to adjust its view on the timing and extent of rate cuts.
Stephen Fitzsimmons discusses how the comments coming out of FOMC meeting this week may well provide insight into the future direction of markets.Bond issuance is on a record setting pace in January.Compelling total return opportunities exist in fixed income.Although the market was early to rally as hard as it did in the end of 2023, the directionality of the rally is the correct one. We look to the Fed meeting this week to provide market insight.
Summary: BlueBay Senior Portfolio Manager Tim Leary explains why bond markets remainhealthy following the retrenchment. Bond markets have given back the sharp gains achieved at the end of 2023.Technicals are quite strong and the market remains liquid and healthy.On the floating rate side of the coin, leveraged loan activity is robust.
In this week’s episode, hear Andrzej Skiba explain how expectations need to be reset after the rally to end 2023, but that opportunities abound. Summary points:The sharp market rally has investors rethinking future return expectations. Significant rate cuts are priced in. When assessing market projections for early rate cuts, we see room for disappointment. On average, Investment Grade, High Yield and MBS spreads look uninspiring. We see plenty of opportunities to generate alpha in attractively-priced opportunities and dislocated idiosyncratic credit stories.
In this week’s episode, hear Brandon Swensen recount the events that have made 2023 a very exciting year for investors. Summary points:The year began against a backdrop of a resilient US economy but one saddled with high inflation.2023 has included volatility from monetary policy, fiscal policy, domestic politics, geopolitics, and company specific events.Markets have rallied into the end of the year, supported by dovish Fed language and the increased chances of a soft economic landing.We believe that going into 2024 there is plenty of potential for volatility to re-emerge, but our base-case is for gradually falling inflation and rate cuts.
Summary:This will be a busy week in the market as investors lookto digest key data readings on key measures. BlueBay Institutional Portfolio Manager Stephen Fitzsimmons outlines thesignificance of the news and our expectations.Key points:· Upcoming data releases will provide furtherclarity to investors.· We’ll see information on small businessoptimism, retail sales, industrial production. News on inflation and the Fed rate decision will be particularlyinsightful.· Wethink that the market’s enthusiasm for rate cuts next year is over-blown,leaving room for disappointment.
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