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Saga of Financial Markets

Fri12152017

Last updateSat, 29 Jul 2017 12am

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It's the $3 Trillion Bond Trade Investors Should Fear!

The size of US corporate bond market has ballooned by $3.7 trillion during the past decade.  In the past, there are 23 types of investors in the bond markets.  But according to Citigroup's strategist Stephen Antczak, majority of the $3.7 trillion growth is now concentrated in the hands of 3 types of buyers:  mutual funds, foreign investors and insurance companies!

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Junk Bond - a Haven in Global Bond Rout?

Junk bond returns are beating investment grade by the most since 2009, according to Bank of America Merrill Lynch indexes. Investors in speculative-grade notes globally earned 4.3 percent this year, while the higher-rated bonds forfeited 0.03 percent, the first loss for the period since 2008.

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Selloff in Government Bonds May 2015

Due to unconventional policy easing (quantitative easing) taken by global central banks, bonds have been among the best performing asset classes in recent years.  But a big sell-off in the government bond markets is happening from Germany to Australia.  On 2015-04-15, the first to "predict" the "sell off" of German Bund was Doug Kass, Head of Hedge Fund Seabreeze Partners Management.  Then on 2015-04-21, Bill Gross agreed and tweeted the German bund as "the short of a lifetime".  Thereafter, on 2015-05-01, Goldman joins Gross on Bund View.

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US likely to hike interest this year

2015-05-22 (Friday) Janet Yellen said: "If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalising monetary policy.”  Subsequent rate rises were likely to be “gradual”, Ms Yellen added, given the headwinds that would continue to hold back growth. It would be “several years” before the federal funds rate was back to its normal, long-term level.

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Will Greece Grexit?

Grexit (Greece's exiting Eurozone) is once again re-appeared as the headline news affecting the market sentiment.  Will Grexit take place?

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