Global
Make EMs Great Again: Trading on Trump
Emerging market outflows have hit record highs and EM bond spreads have widened by over 17bp since business magnate Donald Trump won the US election, a result that continues to influence markets nearly three weeks after the President-elect declared victory. As a picture of what a Trump presidency means for global markets begins to form, EM investors are starting to emerge from the sidelines in…
2 Dec 2016
When The Quantitative Easing Tap is Turned Off: Implications for Emerging Markets
Contrary to popular perception, Quantitative Easing (QE) policies were bad news for Emerging Market (EM) countries. It had the effect of a giant magnet, sucking capital out of Emerging Markets as investors sought instead to allocate to the QE-subsidised markets in Europe and the US.
1 Dec 2016
Top Dealmaker: Demetrio Salorio, Societe Generale Corporate & Investment Banking
Markets in 2016 kicked off much like they appear to be winding down: with many unknowns ahead. Nevertheless, that uncertainty has bookended a record year for debt capital markets globally, as low interest rates and quantitative easing sent money into new regions (particularly emerging markets) and asset classes (such as European high yield), enabling borrowers to capitalise on reduced costs of…
28 Nov 2016
Emerging Market vs. US High Yield: What Is Going On?
Starting at the beginning of 2016, the premium that emerging market high yield bonds offered vanished, and for much of this year, emerging market high yield has actually been trading at a premium to US high yield. That is to say, during 2016 investors have been willing to accept less yield for a basket of corporate bonds domiciled outside developed economies than they have for investing in their…
17 Nov 2016
EM Green Bond issuance to be Unaffected by Trump
Few sectors are facing greater uncertainty from the election of Donald Trump as the new US president than green energy and renewables, but experts are sceptical that the self-confessed climate change denier could actually derail the global drive towards sustainability and stifle the rise of green finance, particularly across EM.
14 Nov 2016
EM Assets Beat US Treasuries Despite Rate Hike Expectations
EMs are experiencing heightened volatility on expectations that rising interest rates in the US under a Trump Presidency will lead to higher returns on currently record-low government debt. However, inflation fears are making longer dated US debt more risky than EM assets, which have retained much more of their value.
11 Nov 2016
October inflows negative, but EM fixed income resilient
EM fixed income portfolio flows dropped sharply in October. However, EM equities saw almost the same amount in inflows. The mismatch can be explained by the various individual credit stories across EM, and there is no sign that the general EM rally will slow any time soon. Although a Fed hike is now almost certain for December, a renewed slowdown in China will have the most serious impact on EMs.
4 Nov 2016
Q4 Emerging Markets Outlook: Are Markets at an Inflection Point?
Emerging Markets have been buffeted by a variety of negative factors this year, but have remained resilient. The overriding factor is that the global liquidity backdrop remains supportive of “risk.” We expect this favourable outlook to continue (more or less) into year-end. It appears, however, that the markets are at an inflection point, which may be enough to put some downward pressure on risk…
18 Oct 2016
Inflows to increase again, but EMs not out of the woods yet
A fall in EM inflows for September can be attributed to concerns over whether the US Fed would hike rates at its last policy meeting this week. With the Fed keeping rates on hold, inflows are likely to rise again, but the main drivers of the EM credit rally, such as a dovish Fed and positive Chinese economic performance are likely to change next year, meaning the 2017 outlook for EMs could be…
26 Sept 2016
Tim Hall: A Global Credit Snapshot
With a low rate environment looking to persist well into next year, it looks like a perfect storm for issuers is taking shape – particularly in emerging markets, where yield hungry investors are searching for higher returns. We speak with Tim Hall, who previously served as Global Head of DCM at Credit Agricole CIB, about the global credit outlook, how DM and EM market shocks – like Brexit or the…
9 Sept 2016