FICC Focus

The unemployment rate will surprise the Fed, rising to 4.5% at the end of this year, says Anna Wong, chief US economist for Bloomberg Economics. Wong joins host and Bloomberg Intelligence chief US rates strategist Ira Jersey to unpack the July FOMC meeting. The pair discuss Chairman Jerome Powell’s dovish tilt at the meeting’s Q&A, and what that means for likely rate-policy outcomes. They also the examine potential implications of possible fiscal-policy changes to inflation, trade policy and real-economic activity.

With US presidential election campaigns in full swing, we thought it prudent to revisit what this year could mean for the municipal bond market in terms of heightened risks -- and even some scenarios where it would benefit. Though past election years have returned more wins than losses for munis, macroeconomic issues accompanying the election will remain a hurdle. To discuss possible threats and the latest federal income-tax developments, hosts Eric Kazatsky and Karen Altamirano are joined by Andrew Silverman and Nathan Dean from Bloomberg Intelligence.

Increased electronification and the growing prevalence of portfolio trading are creating opportunities for systematic credit, which seeks to harness the explosion of data to create models and strategies, says Paul Benson, head of systematic fixed income at Insight Investment. Benson joins BI credit strategists Noel Hebert and Sam Geier to discuss the history of the systematic approach, model dependency, excess liquidity premiums and identifying relative value. That and more in this latest episode of Credit Crunch. Credit Crunch is part of the FICC Focus podcast series.

Steven Major, HSBC’s global head of fixed-income research, joins Bloomberg Intelligence strategists Ira Jersey and Will Hoffman to delve into the complexities of bond markets. They discuss the determinants of long-term interest rates and how supply influences yields. Regulatory constraints on dealer-intermediation are examined, alongside a contrarian outlook for global bonds. The conversation emphasizes the need for intellectual honesty in economic research while exploring the shifting dynamics between goods and services consumption.

Lara Rhame, the chief US economist at FS Investments, joins Ira Jersey and Will Hoffman to tackle the current state of the economy. She discusses how economic resilience is shaping Federal Reserve policy decisions. The trio delves into the potential impacts of upcoming U.S. elections on Treasury markets and the effects of fiscal policy on long-term interest rates. They also explore the implications of sustained deficits and how robust economic indicators contrast with consumer sentiment, revealing a complex landscape for investors.

In this edition of the All Options Considered podcast, BI's Chief Global Derivatives Strategist Tanvir Sandhu is joined by Matt King, Founder of Satori Insights. They discuss the impact of central bank reserves on cross-asset markets.

Shorecliff Asset Management’s Grant Nachman talks about the intellectually-enriching challenges of launching a new firm in this episode of Bloomberg Intelligence’s Credit Crunch podcast. Grant joins BI’s chief US credit strategist Noel Hebert and his colleague Sam Geier to discuss Shorecliff’s full-cycle credit-investing strategy, the benefits of having a lean team, a bottom-up due-diligence process, the ideal size for the strategy and more.

Murat Ulgen, Global Head of EM Research at HSBC, and BI’s Chief Emerging Markets Credit Strategist Damian Sassower discuss how US yields and the dollar have driven emerging-market risk premiums and how resilient the asset class has been to rates repricing throughout 1H. They note dispersion within the broader market, the role of carry and the drivers behind the sentiment change in specific geographies - notably a curtailed bullishness for Latin America, and a shift toward Central and Eastern Europe and Africa. Their conversation spans Turkey, South Africa, China (and its EM role) as well as frontier and distressed markets.

High yield corporate credit had a strong 1H, despite rates volatility, as spreads rallied and defaults stayed low. In Europe, the index default rate stands at 0.85% and the share of stressed and distressed bonds has come down, while it's higher in the US. Will 3Q sustain those gains, and why? Listen to Mahesh Bhimalingam, Bloomberg Intelligence's Chief European Credit Strategist, discuss the results of the 3Q High Yield Survey, along with market outlook, with Peter Aspbury, Head of European High Yield and PM at JP Morgan Asset Management.They discuss the BI 3Q investor survey report, which covers investor positioning, sentiment, key return drivers, default and supply forecasts and relative-value opinions by geography, rating and sector. They also discuss how high grade and leveraged loan prospects compare with junk.

Bloomberg Intelligence's Ira Jersey and Huw Worthington discuss the impact of global elections on bond markets. They delve into US congressional partisanship, French and UK elections' volatility, and the implications of the US Presidential election on trade and geopolitics.