June 19, 2023
United States:
BlueBay Ditches Bearish Long-Bond View, Says Rates Topping Out
Central banks in the US and Europe are signaling further interest rate increases but Mark Dowding, chief investment officer at RBC Bluebay Asset Management, isn’t buying it.
Dowding reckons the Federal Reserve and European Central Bank have probably reached the end of their policy-tightening cycles. He has loaded up longer-duration positions in US Treasuries and German Bunds, reversing his long-held bearish view on longer-tenor debt.
Europe:
Balance Sheets Are Deteriorating for European Firms, A&M Say
More than a quarter of firms in Europe and the Middle East have weak balance sheets, after companies loaded up on debt during the coronavirus pandemic and now face rising interest rates and soaring inflation, according to Alvarez & Marsal.
About 28% of companies were considered to be in this category in 2022, while 8.4% were deemed to be in distress, the consultancy firm said in a report, highlighting the Middle East, Spain and Germany as the regions with the highest proportion of distress.
Asia:
Hong Kong’s $1.9 Trillion Stocks Await Boost From Yuan Trading
Hong Kong is betting that a new program allowing investors to trade equities in the yuan on top of its local currency will help revive its flagging stock market and boost turnover that’s hovering at a four-year low.
The stock exchange is rolling out the so-called HKD-RMB Dual Counter Model on Monday to give traders the option to buy and sell some of the financial hub’s biggest-listed stocks using the yuan, including Tencent Holdings Ltd., Alibaba Group Holding Ltd. and China Mobile Ltd. There are 24 companies on the list with a combined market value equivalent to $1.9 trillion, or more than a third of the city’s total.
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