Editor, Investment Strategy. Europe, Middle East and Africa, London
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May 15, 2013

For all the debt, there’s a shortage of bonds

LONDON (Reuters) – Debt may be everywhere but there’s a scarcity of bonds.

With governments awash with debt and furiously selling new securities to fund bloated budget deficits, the idea of a bond shortage on the marketplace may sound puzzling.

May 15, 2013

Analysis: For all the debt, there’s a shortage of bonds

LONDON (Reuters) – Debt may be everywhere but there’s a scarcity of bonds.

With governments awash with debt and furiously selling new securities to fund bloated budget deficits, the idea of a bond shortage on the marketplace may sound puzzling.

May 10, 2013

QE and yen-inspired ructions in store, even if no currency war

LONDON, May 10 (Reuters) – Most investors see the yen’s
latest lunge as a byproduct of the rich world’s money printing
gambit and not a deliberate escalation in a notional currency
war, but it is raising concerns about possible new ructions.

The yen slid to a 4-year low on Friday, adding to
losses of more than 20 percent against the dollar in the last
six months as Japan’s Prime Minister Shinzo Abe applies an
aggressive monetary and fiscal expansion to try and jump start
his moribund economy.

May 9, 2013
via Global Investing

Weekly Radar: Watch the thought bubbles…

Far from the rules of the dusty old investment almanac, it’s up, up and away in May after all. And judging by the latest batch of economic data, markets may well have had good reason to look beyond the global economic ‘soft patch’ – with US employment, Chinese trade and even German and British industry data all coming in with positive surprises since last Friday. Is QE gaining traction at last?

Well, it’s still hard to tell yet in the real economy that continues to disappont overall. But what’s certain is that monetary easing is contagious and not about to stop in the foreseeable future – whether there’s signs of a growth stabilisation or not. With the Fed, BoJ and BoE still on full throttle and the ECB cutting interest rates again last week, monetary easing is fanning out across the emerging markets too. South Korea was the latest to surprise with a rate cut on Thursday, in part to keep a lid on its won currency after Japan’s effective maxi devaluation over the past six months. But Poland too cut rates on Wednesday. And emerging markets, which slipped into the red for the year in February, have at last moved back into the black – even if still far behind year-to-date gains in developed market equities of about 16%!

May 7, 2013
May 3, 2013

Inflation angst evaporates in race for returns

LONDON, May 3 (Reuters) – For all the trillions of
dollars-worth in new money that central banks are printing,
financial markets seem to be signalling that fears of rampant
global inflation are unfounded.

Over the past month, investors have devoured virtually any
fixed income securities on offer, from the U.S. Treasury to tech
giant Apple, debt-laden euro sovereigns Italy or Slovenia and
even debut bonds from exotic African countries like Rwanda.

May 2, 2013
via Global Investing

Weekly Radar: May days or Pay days?

So, it’s May and time for the annual if temporary equity market selloff, right? Well, maybe – but only maybe.  A fresh weakening of the global economic pulse would certainly suggest so, but central banks have shown again they are not going to throw in the towel in the battle to reflate. The ECB’s interest rate cut today and last night’s insistence from the Fed that it’s as likely to step up money printing this year as wind it down are two cases in point. And we’re still awaiting the private investment flows from Japan following the BOJ’s latest aggressive easing there.

So where does that all leave us? A third of the way through 2013 and it’s been a good year so far for nearly all bulls – both western equity bulls and increasingly bond bulls too! Not only have developed world equities clocked up some 13 percent year-to-date (the S&P500 set yet another record high this week while Europe’s bluechips recorded a staggering 12th consecutive monthly gain in April) , but virtually all bond markets from junk bonds to Treasuries, euro peripherals to emerging markets are now back in the black for the year as a whole. For the most eyebrow-raising evidence, look no further than last week’s debut sovereign bond from Rwanda at less than 7 percent for 10 years or even newly-junked Slovenia’s ability this week to plough ahead with a syndicated bond sale reported to already be in the region of four times oversubscribed. For many people, that parallel rise in equity and bonds smells of a bubble somewhere. But before you cry “QEEEEE!” , take a look at commodities — the bulls there have been taken a bath all year as data on final global demand hits yet another ‘soft patch’ over the past couple of months.

May 2, 2013
May 1, 2013
May 1, 2013
    • About Mike

      "Mike Dolan is Reuters' Investment Strategy Editor in Europe. He has been a correspondent and editor for the past 20 years, working for Reuters from London and Washington DC in a variety of roles covering global policymaking, economics and investment trends."
      Joined Reuters:
      1995
      Awards:
      Reuters Editor of the Year, 2009. Reuters multimedia journalist of the year award, 2011
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