market pulse
November 10, 2018
Monthly Newsletter – November 2018

“An investment in knowledge pays the best interest.” – Benjamin Franklin

Clues from Recent Asset Classes’ Behavior
Macro: Softness across the Board
Oil: Bulls and Bears in a Tug of War
MENA: Potential Geopolitical Easiness in the GCC

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November 6, 2018
Fixed Income Weekly November 4, 2018

Market Update
Easing political tensions and upbeat economic data paved the way for developed sovereign yields to substantially move higher during last week. The U.S. and Germany’s 10 year yields kicked off the week stable to higher, then yields kept marching higher throughout the week on the U.S.-China trade talks, EU inflation data, as well as strong U.S. employment data, closing the week higher by 12bps, at 3.22% and 0.45%, respectively. Japan’s 10 year yield closed the week a bit higher at 0.12%.

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October 22, 2018
Fixed Income Weekly October 22, 2018

Market Update
During last week, the U.S. 10 year yield moved higher on hawkish FED minutes of meeting, increasing U.S. budget deficit, and strong job numbers, however, gains were capped by rising political fears and increasing volatility in global financial markets. The U.S. 10 year yield opened the week stable in anticipation of the FED minutes of meeting. On Tuesday, the 10 year yield jumped by 4bps as the FED reaffirmed gradual hiking of rates. Afterwards, the 10 year yield fluctuated to close the week higher by 4bps, at 3.19%. Germany’s 10 year yield diverted from the U.S. 10 year yield, as the German yields drifted lower on Italy’s issues, whereby, the 10 year yield closed the week lower by 5bps, at 0.45%. Japan’s 10 year yield closed the week flat as a pancake, at 0.14%.

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October 16, 2018
Fixed Income Weekly October 15, 2018

Market Update
The massive sell-off in global financial markets has forced developed sovereign yields to drop during last week as investors rushed into safe haven investments. The bloodbath started in equities then it quickly spilled into other asset classes. In the fixed income space, the pain was most pronounced in the high yield segment as investors pulled more than USD6 billion from junk bonds in the past week, largest outflow since February. Nevertheless, the U.S. 10 year yield kicked off the week higher by touching the highest point this year, at 3.25%, then it quickly lost traction as the sell-off in financial markets intensified. On Friday, the 10 year yield moved slightly higher on receding market risks. Nonetheless, the U.S. and Germany’s 10 year yields closed the week lower by around 7bps, at 2.16% and 0.49%, respectively. Japan’s 10 year yield closed the week stable at 0.14%.

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October 3, 2018
Fixed Income Weekly October 1, 2018

Market Update
Long dated developed sovereign yields traded in a wide range during last week on a dovish FOMC, rising political fears and hawkish Draghi. The U.S. and Germany’s 10 yields kicked off the week higher in anticipation of the FED meeting as well as hawkish comments from Draghi. Afterwards, yields reversed course and moved lower in the wake of a soft stance by the FED on the U.S. expected inflation. The downward trend intensified at the end of the week on Italy’s proposed budget and weaker EU inflation data. Nonetheless, the U.S., Germany, and Japan’s 10 year yields closed the week unchanged at 3.06%, 0.46%, and 0.12%, respectively.

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October 16, 2018
Monthly Newsletter – October 2018

“Life must be understood backwards; but it must be lived forwards.” – Soren Kierkegaard

Clues from Recent Asset Classes’ Behavior
Macro: Mixed Global Picture
Oil: Prices Crossed the Key Resistance of USD 80 per Barrel
MENA: Putting Rising Oil Prices into Perspective

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October 3, 2018
Fixed Income Weekly September 24, 2018

Market Update
The upward trend in developed sovereign yields continued during last week on less severe outcomes from the U.S.-China trade spat, persistent strong oil prices, and supportive macroeconomic data, however, gains were capped due to rising political fears in EU. The U.S. 10 year yield started the week stable in anticipation of the new tariffs that the U.S. will impose on China. Afterwards, the 10 year yield jumped higher and kept its gains throughout the week on receding fears regarding the trade war between the U.S. and China. Germany’s 10 year yield mimicked the U.S. 10 year yield moves during last week, and at one point, it breached the 0.50% threshold, however, Germany’s 10 year yield lost traction on failed Brexit talks as well as rising noises about Italy’s budget. Japan’s 10 year yield remained stable during last week, but interestingly, the 20 year yield jumped to the highest level since April 2017 as the BOJ trimmed its buying of bonds due in more than 25 years, marking the first reduction in the segment since July of this year. Nevertheless, both the U.S. and Germany’s 10 year yields closed the week higher by 7bps and 2bps, at 2.06% and 0.46%, respectively.

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September 9, 2018
Fixed Income Weekly September 3, 2018

Market Update
The global trade war narrative, accompanied with the emerging market currencies woes, dominated the scene during last week and overshadowed the strong inflation data in the U.S. The long dated developed sovereign yields were forced to keep trading in a range bound mode. The U.S. 10 year yield kicked off the week higher on optimism regarding the talks between the U.S. and Mexico, afterwards the 10 year yield rose further on strong U.S. PEC data, whereby it touched the FED’s 2% target. At the end of the week, the 10 year yield lost some traction on the renewed protectionism talks made by President Trump. However, the U.S. 10 year yield closed the week slightly higher by 4bps, at 2.86%. Meanwhile, Germany’s 10 year yield shed 2bps last week as it was affected by the softer inflation data and rising fears from Italy and the UK. Japan’s 10 year yield closed the week flat to unchanged, at 0.10%.

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September 9, 2018
Monthly Newsletter – September 2018

“Friendship is always a sweet responsibility, never an opportunity.” – Khalil Gibran

Clues from Recent Asset Classes’ Behavior
Macro: Divergence in Global Growth Trends
Oil: Supply is Tightening
MENA: The IMF on Saudi Arabia

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August 9, 2018
Monthly Newsletter – August 2018

“Life is like riding a bicycle. To keep your balance, you must keep moving.” – Albert Einstein

Clues from Recent Asset Classes’ Behavior
Macro: Global Growth is less Synchronized
Oil: Prices Moving in a Tight Range
MENA: Is Egypt’s Market at an Inflection Point?

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