Fixed Income Archives - Page 16 of 17

March 22, 2012

Pimco Eyes Aussie Bond Boom – WSJ

“We really are in a secular shift for greater demand for fixed income securities in Australia,” John Wilson, the head of the global bond giant’s [Pimco’s] Australia operations told Deal Journal Australia. “That’s why you will see increasing issuance in the domestic market by domestic issuers.”

“We are seeing this notably in our flows in the wealth management business. Private investors are seeking recurring income and capital stability,” he said.

In recent weeks some of Australia’s national champions–such as retailing giant Woolworths and conglomerate Wesfarmers–have issued local currency debt even as some of the country’s other big corporates have skipped local investors and borrowed elsewhere.

via Pimco Eyes Aussie Bond Boom – Deal Journal Australia – WSJ.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

March 17, 2012

MARC FABER: Beware The Unintended Consequences Of Money Printing

Marc Faber: I do not believe that the central banks around the world will ever, and I repeat ever, reduce their balance sheets. They’ve gone the path of money printing and once you choose that path you’re in it, and you have to print more money.

If you start to print, it has the biggest impact. Then you print more – it has a lesser impact unless you increase the rate of money printing very significantly. And, the third money printing has even less impact. And the problem is like the Fed: they printed money because they wanted to lift the housing market, but the housing market is the only asset that didn’t go up substantially.

In general, I think that the purchasing power of money has diminished very significantly over the last ten, twenty, thirty years, and will continue to do so.

via MARC FABER: Beware The Unintended Consequences Of Money Printing.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 17, 2012

The Power of Cheap Money | Puru Saxena | Safehaven.com

Mr. Bernanke is intentionally suppressing the nominal risk free rate of return and he is forcing investors to search for yield. By keeping interest rates artificially low and well below the rate of inflation, the Federal Reserve has engineered this impressive rally in American stocks.

Figure 2 captures the real US Treasury Yield Curve [after deducting inflation] across various maturities. As you can see, the real yields of the entire US Treasury Yield Curve (except the 30-Year US Treasury Bond) are currently negative.

Real US Treasury Yields

via The Power of Cheap Money | Puru Saxena | Safehaven.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

March 14, 2012

Treasury yields surge

The yield on 10-year US Treasury Notes has surged to test resistance at 2.40 percent. Breakout would indicate a rally to the long-term trendline at 3.00 percent on the Monthly chart. Rising treasury yields signal that investors are migrating out of bonds and into stocks, especially when the Fed is attempting to suppress long-term rates.

10-Year Treasury Yields

February 2, 2012

The Euro Crisis Makes Absolutely No Sense – Brett Arends (WSJ)

WSJ: Mean Street

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Brett Arends exposes flaws in Eurozone efforts to resolve the currency crisis.

January 19, 2012

Treasuries still bearish

10-Year Treasury yields remain weak. Look for recovery above 2.40 percent to confirm the primary up-trend in stocks.

10-Year Treasury Yields

November 22, 2011

RAFI ETF Investing: Q&A With Rob Arnott | ETF Database

When you think about capitalization weighting in stocks the drawbacks are fairly evident. When you talk about cap weighting in bonds, the drawbacks are flagrantly obvious.

With cap weighting, consider that Australia has three times the GDP of Greece, and Greece has three times the debt burden of Australia. Why should we want to own three times as much in Greek debt as Australian debt? In fact, Australia’s ability to service debt is at least three times that of Greece, and so wouldn’t it make more sense to have an index for bonds that weights countries’ bond debt in accordance with GDP and other measures of the economic footprint of a country?

via RAFI ETF Investing: Q&A With Rob Arnott | ETF Database.

November 22, 2011

Getting The Most Out Of Your Bond ETFs

Market cap weighting has long been the traditional strategy for not only ETFs, but almost all basket funds. But as the ETF industry expanded, many have realized the benefits of alternative weighting strategies as a number of them outdid their cap-weighted counterparts. More recently these strategies have waded into fixed income territory and yielded several interesting bond ETF products:

SPDR Barclays Capital Issuer Scored Corporate Bond ETF (CBND) – This ETF uses three fundamental factors to determine the weight given to each debt it holds: return on assets, interest coverage, and current ratio.
Fundamental High Yield Corporate Bond Portfolio (PHB) – This product uses the RAFI approach to selecting its holdings using four factors: book value of assets, gross sales, gross dividends, and cash flow–each based on five-year averages. Note that PHB is classified in the high yield or “junk bond” category.
Fundamental Investment Grade Corporate Bond (PFIG) – PFIG also uses the RAFI weighting methodology, but instead applies it to investment grade corporate bonds.

via Getting The Most Out Of Your Bond ETFs.

November 3, 2011

Falling Treasury yields warn of money flowing out of stocks

10-Year Treasury Yields are testing medium-term support at 2.00 percent. Failure would indicate another primary decline — and bad news for stocks.

10-Year Treasury Yields

November 1, 2011

Ex-Product Sketch | The Big Picture

There have been many cries to regulate or ban the existence of Sovereign CDS, both from the sovereigns that felt their nations under attack, and by the masses who see them as one of Satan’s investment bank tools designed to steal from the poor………

But there is a viable alternative. TMM would like to introduce their readers to the humble Bond Future. That long-standing, well-understood derivative that has provided liquidity, transparency and price discovery to bond markets in many countries for 40 years. Bond futures with deliverable bond baskets allow basis trading, speculation and hedging, without the idiosyncrasies of CDS contracts. But of course, futures markets aren’t that profitable for banks… well, you reap what you sow, right?

via Ex-Product Sketch | The Big Picture.