Suki Mann

Author Archives: Suki Mann

26th January 2021

🗞️ Weighing up the risks

Front running policy… Talk of impending doom – market implosion and the like – is just that. Accommodative policy and too much liquidity sloshing around the financial system will keep risk propped up through 2021. Investors, however, have taken their stake in the market and are just front-running this particular dynamic. In equities, earnings are […]
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25th January 2021

🗞️ Vaccine angst riles market

Net, net we will muddle through… Asian markets (especially China) are firing ahead and the US equity markets are setting record highs at least once or twice a week. The former is the world’s manufacturing unit, the latter is being driven by expectations that a stimulus package will soon be agreed and propel activity Q2 […]
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24th January 2021

🗞️ Solid opening stanza

We’ll take that… The euphoria faded almost as quickly as it erupted although markets managed to hang on to enough of their gains, keeping them in the black for the week as well as for the opening period of 2021. The issues are unchanged. The pandemic represents the immediate angst, and the vaccine roll-out the […]
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21st January 2021

🎇 Biden bounce fizzles out

Great start, more please… It’s going to be strange, after four years of Trump, to return to normal. The establishment is back. As markets and investors adjust, the imponderables now don’t really take in domestic US political risk, or uncertainty. We know what coming in that sense. As politics become much more predictable, we can […]
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19th January 2021

🗞️ Investors positioning ahead of the curve

Biden transforms into markets’ great white hope… The week is going to be one of stops and starts. In corporate primary, we haven’t had much – save for Total SA lifting €3bn of hybrids on Monday – and it’s likely going to be about opportunistic prints from here on. Biden’s inauguration on Wednesday and the […]
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17th January 2021

🗞️ Credit’s in a funny little place

Immune to volatility… The Japanification of the European corporate bond market is reaching its denouement. As it commoditises, investor acceptance (or, rather, frustration) is peaking at the lack of liquidity in secondary. There is a lack of excitement in not being able to transact worthwhile (or enough) relative value trades. Almost like zombies, we follow […]
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13th January 2021

🗞️ US stimulus, recovery…

Will keep the music playing… Another day, another slew of borrowers but… the massive risk-on tone in credit primary has faded. Exuberance in the pricing process from the initial guidance to final terms is getting a little too much for some and the dropouts during that phase can’t be ignored for too much longer. This […]
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12th January 2021

🗞️ Day of reckoning pushed back

No stopping these markets… Much has been thrown at this market, particularly during the last couple of years (US/China trade, Trump, Coronavirus, Brexit and lots more) and now the ‘incitement of insurrection’ impeachment in the US. The next hurdle (it ought not to be) is the Biden inauguration. Yet most are still looking for equities […]
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11th January 2021

⚙️ Primary credit shifts up a gear

Crypto wobbles… A reminder that what goes up, can also come down. That was most evident in the crypto space with double-digit losses highlighting the market’s susceptibility that comes from it lacking the sort of depth that traditional markets might enjoy. It is yet to be seen if this ‘go-to’ market’s decline (Bitcoin came off […]
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10th January 2021

👨‍⚕️ Men in white coats, please

MARKET CLOSE:
iTraxx Main

47.6bp, unchanged

iTraxx X-Over

246.0bp, -1.8bp

🇩🇪 10 Yr Bund

-0.53%, -1bp

iBoxx Corp IG

B+96.4bp, -0.7bp

iBoxx Corp HY

B+342.5bp, -3bp

🇺🇸 10 Yr US T-Bond

1.10%, +3bp

🇬🇧 FTSE 100

6873, +16

🇩🇪 DAX

14,049, +81

🇺🇸 S&P 500

6824, +21

Biden’s inauguration can’t come soon enough…

It surely can’t be as exciting this week. However, risk markets will possibly continue their rally. We are unlikely going to see the big moves of last week as the US stimulus euphoria most likely fades some. The opening rally was about getting ahead of the curve of the announcements due after the Jan 20 US Presidential inauguration. We would expect that it’s about taking baby steps higher from here.

Not least because other issues are emerging which might need a little focus. That is, US political chaos and intrigue. We’re likely going to see a bit of volatility, but the impeachment moves against Trump ought not to cause too much angst in the markets.

The general push higher in equities from now will nevertheless likely lead to a disproportionate tightening in credit spreads as poor secondary market liquidity elicits a good old fashioned squeeze in spreads. We’ve seen a bit of that, but with few chasing the market and waiting for primary, the tightening should accelerate through Q1.

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