Insights With Topics: Bond
The time has come – Federal Reserve chair Jerome Powell finally signalled that rate cuts will likely start in Sep at Jackson Hole, though his remarks offered few clues as to how the Fed might proceed after its Sep gathering. On the surface, extending duration in US Treasuries appears to be a straightforward decision given the assumption that falling interest rates will lead to rising bond prices. However, it is not without risks and complexity as we are entering the rate cut cycle against very different backdrop from previous cycles. In this article, we discuss the intricacies of the upcoming rate cut trajectory, and why US Treasury Floating Rate Notes (FRNs) remains a relevant strategy for investors seeking diversification and stability as a result of the very much inverted yield curve, and market uncertainties in this journey.
Aug 28, 2024
The time has come – Federal Reserve chair Jerome Powell finally signalled that rate cuts will likely start in Sep at Jackson Hole, though his remarks offered few clues as to how the Fed might proceed after its Sep gathering. On the surface, extending duration in US Treasuries appears to be a straightforward decision given the assumption that falling interest rates will lead to rising bond prices. However, it is not without risks and complexity as we are entering the rate cut cycle against very different backdrop from previous cycles. In this article, we discuss the intricacies of the upcoming rate cut trajectory, and why US Treasury Floating Rate Notes (FRNs) remains a relevant strategy for investors seeking diversification and stability as a result of the very much inverted yield curve, and market uncertainties in this journey.
Aug 28, 2024
AsiaASEANChinaBondChina BondsNew EnergySmart EVNew EconomySTAR BOARDSmart BetaVietnamMiddle Income ClassHigh YieldTax Efficient
In the US the “triple peaks” in economic growth, earnings growth and policy stimulus will likely result in much lower returns for US equities in 2022. The persistently high inflation – which will likely run hotter in the US than Europe and Japan – is already causing greater volatility as US equities are put on tenterhooks over the timing and magnitude of rate hikes. Meanwhile US Dollar could weaken on inflation rather than strengthen on higher Treasury yields. On the other hand, Emerging Markets, usually do better during periods of Dollar weakness but this time we could see a new twist - this favours China, supported by easier financial conditions. On top of all these, how is the Omicron Virus going to impact the global markets and what are the implications for global asset allocations in 2022? Why ASEAN would be a good diversification within Emerging Markets? Further to Part 1 of our 2022 outlook piece earlier, in this Part 2 sequel our Senior Advisor Say Boon Lim laid out the scenarios and discussed how we can reposition for the global shifts accordingly to address the transition to tightening and pivot from US equities.
Dec 16, 2021
AsiaASEANChinaBondChina BondsNew EnergySmart EVNew EconomySTAR BOARDSmart BetaVietnamMiddle Income ClassHigh YieldTax Efficient
In the US the “triple peaks” in economic growth, earnings growth and policy stimulus will likely result in much lower returns for US equities in 2022. The persistently high inflation – which will likely run hotter in the US than Europe and Japan – is already causing greater volatility as US equities are put on tenterhooks over the timing and magnitude of rate hikes. Meanwhile US Dollar could weaken on inflation rather than strengthen on higher Treasury yields. On the other hand, Emerging Markets, usually do better during periods of Dollar weakness but this time we could see a new twist - this favours China, supported by easier financial conditions. On top of all these, how is the Omicron Virus going to impact the global markets and what are the implications for global asset allocations in 2022? Why ASEAN would be a good diversification within Emerging Markets? Further to Part 1 of our 2022 outlook piece earlier, in this Part 2 sequel our Senior Advisor Say Boon Lim laid out the scenarios and discussed how we can reposition for the global shifts accordingly to address the transition to tightening and pivot from US equities.
Dec 16, 2021
The US Federal Reserve has signalled the imminent start of the transition from the Great Stimulus of 2020-2021 to a period with new uncertainties. The Fed’s suggested pace of tapering quantitative easing was at the high end of expectations. In this article our Senior Advisor Say Boon Lim discusses his thoughts on what to expect regarding US inflation rate and 10Y UST yield, and why we need to brace for more challenging US equity and bond markets with lower return and higher risk coming up on the horizon.
Oct 5, 2021
The US Federal Reserve has signalled the imminent start of the transition from the Great Stimulus of 2020-2021 to a period with new uncertainties. The Fed’s suggested pace of tapering quantitative easing was at the high end of expectations. In this article our Senior Advisor Say Boon Lim discusses his thoughts on what to expect regarding US inflation rate and 10Y UST yield, and why we need to brace for more challenging US equity and bond markets with lower return and higher risk coming up on the horizon.
Oct 5, 2021
It is inevitable that the traditional 60/40 asset allocation split between bond and equity no longer work well as the fixed income portion is not generating sufficient stable income.
May 6, 2021