market pulse
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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August 7, 2018
Fixed Income Weekly August 6, 2018

Market Update
During last week, traders were braced for many important events, starting from central banks meetings to the U.S. employment data. Nevertheless, developed sovereign yields started the week lower and the U.S. yield curve flattened, amid the Bank of Japan’s decision to keep its interest rates low for an extended period. Afterwards, traders turned their attention towards the FED and BoE meetings, whereas yields moved higher, as the U.S. 10 year yield broke the 3% threshold and Japan’s 10 year yield rose to an 18-month high, on the back of strong U.S. economic data (ADP) and the U.S. Treasury announcement that it would issue more long term debt to bridge its budget deficit. Notably, Italy’s 10 year yield jumped higher on the government budget talks, which might put the country on a direct collision course with EU partners. However, at the end of the week, yields lost traction in renewed trade war rhetoric and weak U.S. employment numbers. Nonetheless, the U.S. and Japan’s 10 year yields closed the week flat to unchanged, at 2.95% and 0.10% respectively, whilst Germany’s 10 year yield closed the week lower by 4bps at 0.40%.

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July 24, 2018
Fixed Income Weekly July 23, 2018

Market Update
Last week was exceptionally rich in economic, monetary, and political events. However, the Bank of Japan news took the center stage and forced global developed sovereign yields to close the week higher. The U.S. and Germany’s 10 year yield kicked off the week slightly higher in anticipation of Powel’s positive note on the U.S. economy. Afterwards, yields remained stable up until Friday, when yields spiked higher on the back of speculation that the BOJ may turn hawkish soon. Nevertheless, the U.S. and Germany’s 10 year yields closed the week higher by 7bps and 3bps, at 2.89% and 0.37%, respectively. Japan’s 10 year yield closed the week flat at 0.03%.

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July 22, 2018
Fixed Income Weekly July 16, 2018

Market Update
The trade war narrative, accompanied with NATO’s summit, low oil prices, and the U.S. inflation, dominated the scene during last week. The U.S. 10 year yield kicked off the week higher, however, it lost traction on renewed trade war threats and an intense atmosphere during the NATO’s meeting. In Europe, hawkish Draghi and ECB minutes of meeting forced Germany’s 10 year yield to move higher during last week. Nevertheless, the U.S. and Japan’s 10 year yields closed the week almost unchanged, at 2.82% and 0.03%, respectively. Germany’s 10 year yield closed the week higher by 4bps at around 0.34%.

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July 22, 2018
Monthly Newsletter – July 2018

“To return to the root is to find the meaning, but to pursue appearances is to miss the source” – Seng Ts’an

Clues from Recent Asset Classes’ Behavior
Macro: Trade War Is Weighing On the Outlook
Oil: Uncertainties Could Lead To Price Spikes
MENA: The Month of June Was Full Of Action

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June 27, 2018
Fixed Income Weekly June 25, 2018

Market Update
The escalating trade war remained the dominant theme during last week and adversely affected developed sovereign yields as investors rushed into safe haven investments. Developed yields started the week lower in anticipation of rising tensions between the U.S. and China. Afterwards, yields slightly moved higher despite renewed trade war worries and rising political fears. Nevertheless, the U.S. and Germany’s 10 year yields closed the week lower by 2bps and 6bps, at 2.89% and 0.33%, respectively. Japan’s 10 year yield closed the week unchanged at 0.03%.

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