Inflation Shock Will Hit India, Russia, Mexico Bonds Hardest

If the recent spike up in U.S. inflation numbers is a sign of things to come for global markets, that could prove especially bad news for debt investors in certain EM markets like Indian, Russian and Mexican. Message us to learn to monitor macro risk factors using Overbond’s market surveillance tools. Source: Bloomberg The fixed-income…

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Mistakes by Markets?

Bonds might have overreacted on inflation; “Pay Rises, Not Price Rises” Source: Reuters With yields across the developed world in free-fall, markets appear to have convinced central banks that only drastic monetary stimulus can prevent inflation expectations from evaporating for a lifetime. But might those markets be reading it wrong? If so, policymakers in Japan,…

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Rates are shooting higher on inflation fears, 10-year yield its highest in nearly 4 years

 The yield on the benchmark 10-year Treasury note surged to 2.727 percent on Monday, its highest since April 2014, as investors bet on an accelerating economy and inflation. Source: CNBC A falling dollar this month has also helped drive yields higher, as traders worry it may reduce the appetite for Treasurys, while also boosting inflation. The 10-year yield…

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Ted’s Macro View – How Accurate are the Bank of Canada’s Inflation Forecasts?

Economist Ted Carmichael analyzes the accuracy of the Bank of Canada’s inflation projections over the past few years, providing insight on the implications and conclusions. Source: Ted Carmichael Global Macro The Bank of Canada is an inflation-targeting central bank. It sets monetary policy with an objective of returning the inflation rate to the 2% target within…

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Bond Investments that Beat Inflation

Income opportunities in fixed income still exist amid rising inflation Source: Morningstar The degree may vary, but most economists agree that inflationary pressures are re-emerging. A combination of factors, including a rising oil price, Trump’s reflationary fiscal policies and, in the UK, Brexit, are contributing to higher inflation expectations. Inflation has is an historic foe for…

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More Than One Worry Is Hitting Bond Markets

Bond yields keep going up in response to higher inflation, lower global risk, and changing central-bank policies. Source: The Wall Street Journal There is a little bit of fear creeping into government bond markets. It is about time, even if investors are still underestimating how much long-term Treasury rates could rise from here. Government bonds are…

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