Debt and Credit Outlook

Debt and Credit Outlook - Articles & White Papers

White papers and articles relating to the debt and credit outlook; covering sovereign bonds, corporate bonds, municipal fixed income, high yield and index-linked bonds. Amongst the most popular fixed income research in this section are papers on bond market liquidity risk, in particular studies of global financial market liquidity and surveys of long-term US interest rates (why long-term interest rates are so low, etc). White papers on bond market valuation tend to be well received. For example, an analysis of the valuation of UK index-linked gilts (why are linkers persistently overvalued?) has been a popular paper. As expected, reports which examine the interest rate outlook have proved popular, particularly those seeking to explain the thought-processes at the FOMC, ECB, BoE, MPC et al. Amongst the periodic fixed income outlook documents on the site, perhaps the most popular is the Prudential Fixed Income Quarterly Outlook and the Goldman Sachs Global Fixed Income Outlook. Practical papers for fixed income fund managers have also proved popular, for instance on managing credit and interest rate risk in the current environment, or the implications of negative yields for fixed income funds.
  • Robeco

    Expected Returns 2017-2021: It’s Always Darkest Just Before Dawn (Robeco, Oct 2016)

    Sentiment among professional investors seems to have reached new lows, and truly, there are enough reasons investors can think of to justify a bearish view on financial markets. We can see the disintegration of the European economy (Brexit, the rise of populist parties, Italian banks), a Chinese hard landing (unsuccessful rebalancing of the Chinese economy, high debt), a rise in ...

    • Professional
    • Views: 5897
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  • World’s largest hedge fund chief: The economy looks grim in the long-term (May 2017)

    In this blog post, Ray Dalio of Bridgewater Associates discusses the near- and long-term prospects for the global economy. The near term looks good because the economy is now at or near its best, and there no major economic risks on the horizon for the next year or two. The long-term looks scary because there are significant long-term problems (e.g., high debt and non-debt ...

    • Professional
    • Views: 1630
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  • JP Morgan - Asset Management

    2017 Long-Term Capital Market Assumptions (JP Morgan)

    This edition of JP Morgan's Long-Term Capital Market Assumptions is written against a backdrop of low investment return expectations, slow global growth and unprecedented monetary policy decisions. The paper considers the long-term impact of the structural factors affecting economies today on a 10 - 15 year investment horizon. 

    The detailed 90 page document ...

    • Professional
    • Views: 1295
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  • PineBridge Investments

    2017 Mid-Year Outlook: Great Expectations for Global Growth (PineBridge, June 2017)

    We have seen some surprises in global markets and economies thus far in 2017. The biggest risk to global growth – political risk in Europe – has largely been defanged, but political risk in the US and Latin America is gaining strength. Economies in China and Europe have also surprised on the upside, spurring expectations for more synchronized growth among developed ...

  • Royal London Asset Management

    Securitised Bonds: Finding Security in Bond Markets (RLAM, 2017)

    Secured (or securitised) bonds still carry the stigma of the 2008 financial crisis. But stigma often spells opportunity, and the fixed income specialists at RLAM argue that this asset class offers great value for managers who are prepared to get to grips with the documentation underlying individual securities. Not everyone is prepared to do this research, and as a result secured ...

  • Schroders

    Long-run asset class performance: 30yr return forecasts (2017-46) Schroders

    Schroders Economics Group produces 30-year return forecasts, on an annual basis, for a range of asset classes. Here they outline the methodology used, which is based on a series of building blocks and estimates of risk premia, and surmise the key conclusions from our analysis. For the first time, this year they are also publishing a wider range of country-specific returns for ...

    • Professional
    • Views: 1754
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  • Credit Suisse

    The Future of Monetary Policy (Credit Suisse, 2017)

    This Credit Suisse paper looks at the transformative changes central banks in advanced economies have undergone since 2008. The report concludes that the key issue for decision-makers globally remains to consider which fundamental direction monetary policy ought to take next, assessing two alternative scenarios that may evolve: a return to a pre-crisis "normal", or fiscal dominance.

  • Federal Reserve Bank of San Francisco

    Measuring the Natural Rate of Interest (John Williams of FRBSF, Dec 2016)

    U.S. estimates of the natural rate of interest – the real short-term interest rate that would prevail absent transitory disturbances – have declined dramatically since the start of the global financial crisis. The authors of this paper find that large declines in GDP trend growth and natural rates of interest have occurred over the past 25 years in the four economies ...

  • BNP Paribas Asset Management

    BNP Paribas Investment Outlook 2017: Beyond the shadow of quantitative easing

    BNP Paribas Investment Partners presents its latest views and expectations. This outlook is designed to help investors prepare for 2017 by setting the scene for a year in which a new landscape awaits: the world's largest economy is coming under new leadership and leading central banks are expected to gear up for either policy tightening ─ specifically in the US ─ or ...

    • Professional
    • Views: 1282
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  • Robeco

    Credit Quarterly Outlook: Perplexing complacency (Robeco, July 2017)

    Robeco’s Credit team sees a world full of imbalances that can last for years or correct at any time. The team remains worried about complacency and expensive markets, but acknowledges that markets can remain complacent and expensive for a long time. There is still a lot of liquidity searching for return.

    Speed read:

    • The credit cycle is aging and many ...

  • Deutsche Asset Management

    CIO View: Quarterly Investment Outlook (Deutsche Asset Management, July 2017)

    During the first half of 2017, central banks have continued to be accommodating and, for the first time in years, we can expect a simultaneous pickup in both the emerging and advanced economies. Deutsche Asset Management CIO, Stefan Kreuzkamp, examines the prospect of a "Goldilocks" economy and discuss the impact on fixed income and equity markets. He also ...

  • UBS Asset Management

    The reversal of U.S. QE: Everything you need to know (but were afraid to ask) UBS, June 2017

    With Quantitative Easing such a key influence on markets, we analyze why the Fed has decided the time is now right, how the Fed will reduce its holdings and the likely reactions of investors across asset classes. With the security buffer of liquidity slowly being reduced, our view is that all asset classes will gradually become more susceptible to bursts of higher volatility.

  • How the Economic Machine Works (Ray Dalio)

    The economy is like a machine. At the most fundamental level it is a relatively simple machine. But many people don’t understand it – or they don’t agree on how it works – and this has led to a lot of needless economic suffering. In this brief article, Ray Dalio of Bridgewater Associates, shares a practical economic template describing how he believes it ...

  • MSCI

    Navigating Central Bank Intervention in Corporate Bond Markets (MSCI, 2017)

    • 04 May 2017
    • Company: MSCI

    Since the 2008 financial crisis, major central banks have purchased $9 trillion of bonds in efforts to reinvigorate the global economy. Government guaranteed securities comprise 96% of these purchases. Several central banks have purchased corporate bonds; the European Central Bank (ECB) is the largest buyer of these bonds and remains an active purchaser. With signs of rising ...

  • BNP Paribas Asset Management

    What makes Emerging Markets Fixed Income attractive – even under a Trump presidency? (BNP Paribas, Apr 2017)

    It has not gone unnoticed globally that Donald Trump is now in the White House of the United States of America. Love him or hate him, his Presidency and policies are likely to have implications that resonate around the world. As investors in Emerging Markets Fixed Income, the key question that we therefore currently have to address is how his plans may impact the emerging market ...

  • Loomis, Sayles & Company, L.P.

    Bank Loans: Looking Beyond Interest Rate Expectations (Loomis Sayles, Apr 2017)

    Fixed income investors may be stymied by the current mix of interest rate projections and global macroeconomic news. Interest rates remain near historical lows, and investors continue to move between risky assets and relative safe havens like Treasurys based on the latest market headlines. We believe that bank loans can be a compelling addition to fixed income portfolios in this ...

  • Invesco (Europe)

    Sizing up Europe's corporate pension gap (Invesco, 2017)

    The well documented decline in corporate bond yields driven by central bank monetary stimulus has led to a substantial rise in reported deficits among corporate Europe’s defined benefit pension schemes. In the UK alone, pension deficits of FTSE 350 companies nearly doubled over the first half of 2016.

    The pension funding gap is a regional problem, but is more acute for ...