Editorials Library

What has happened to bonds? 2022 has been a difficult year for financial markets and especially for bonds. The asset class usually seen as a safe haven for investors is suffering only its second double digit decline since 1931 and marking a negative year for only the...

Will there be a dovish pivot? After several weeks of declines, equity markets recovered some ground in October.  This happened despite the Federal Reserve confirming tighter monetary policy was needed and economic data coming in mixed.  On the other hand, company...

“Lehman moment” avoided? Last week, the Bank of England took emergency action to avoid a meltdown in the UK pensions sector, unleashing a £65bn bond-buying programme to stem a crisis in government debt markets. It all started after the government announced a new tax...

A new sovereign debt crisis? The strength of the dollar could lead to a sovereign debt crisis.  While the US dollar has been the one consistent winning trade of 2022, it could force several countries hit by economic hardship to default on their debt. As economic...

Is the Fed engineering a recession? The US Federal Reserve made a bold statement in June by hiking rates by 0.75%, the biggest rise in almost 30 years.  It is widely expected that July’s rate hike will also be for 0.75%, showing just how committed the Fed is to get...

NO RECESSION FOR NOW It’s looking increasingly likely that a recession will be avoided in 2022, despite evidence that growth prospects are weakening.  The jobs report for May showed that hiring is still expanding at a healthy rate. Manufacturing and services sectors...

The Fed conundrum Last week, US GDP fell at an annual rate of 1.4% which was worse than forecast. At the same time, the US just like the rest of the world is facing very high inflation and with no meaningful drop in sight, at least in the short term.  As a result, the...

Recession looming? You may have heard lately that the two and ten-year yield curves have inverted and that it’s an indication a recession is coming. What it means in short is that the bond market isn’t buying the idea that the Fed is going to be able to engineer a...

Quick take on the war in Ukraine: The economic sanctions inflicted on Russia have led to dramatic price increases in all commodities. Oil and natural gas have hit multi year highs while food staples such as wheat have smashed record highs.  This leaves the world with...

Making sense of the recent market downturn: US stock markets have had a tough month of January. In fact, the worst start to the year since the financial crisis.  The main drivers of this negative sentiment are rising inflation and the rising interest rate regime...

New spanner in the works: On Friday 26th of November as the first news of the Omicron strain emerged, US markets had their worst day in a year.  Furthermore, oil plunged 16% in only a few days, after several countries announced travel bans for South Africa where the...