Bonds In Conversation : Preparing For Hysteria
I am not sure how everyone’s week went, but if everyone is feeling like me, they will be mighty confused as we hit a speed bump in the markets and seeing some reversals amidst a tensed and highly skittish marketplace.
Big stories –
* Oil broke through $54 resistance, and resisted the Saudi output increase news, holding at $56 as I type. I don’t think we will see $60 anytime soon . https://tradehaven.net/market/commodity-crackles-lets-start-with-oil/
* Grexit as even William Hill stopped taking bets on Greece leaving the Eurozone causing some peripheral damage to Spain and gang. As for the EURUSD, it seems to have a positive correlation, heading higher with expectations which means if Greece delivers next week, hmmm.
link to Bernie’s post : https://tradehaven.net/market/ad-hoc-commentary-schauble-thinks-we-are-blind/
* Peace on Earth as Russian Ruble strengthens against the USD to its strongest since Dec 2014 and ISIS losing ground in a big way in Iraq.
* 32 Days Is a Long Time Without a Record for U.S. Stock Investors. No new records for a over a month for the S&P 500. http://www.bloomberg.com/news/articles/2015-04-17/32-days-is-a-long-time-without-a-record-for-u-s-stock-investors
* Worst Chinese growth numbers lift Asian equities to 7 year highs ?
* Change in Fed speak which has pushed out rate hike expectations to 3Q and into 2016/7, flattening the curve into 5Y i.e. less hikes priced.
* Junk bond risks highest since 2004 as S&P warns that more Chinese developers could default in 2015 on their current slack operating performance which means we should watch Kaisa closely in the coming week for indications that the authorities will allow it to happen.
Well, we are making hay while the sun shines and there has been a rush to issue except that demand has been specific skewed to high grade issuance, especially in Asia.
Singapore bucked the trend after GDP and the semi annual MPS (Monetary Policy Statement) assuaged investor fears for further SGD weakness. We saw the first oil and gas name in a while – Indus Gas which managed to raise SGD 100 mio with the support of an internal (company related) investor.
Elsewhere I note some banks pushing out the inventory with some persuasive sales pitches on the merits of buying high yielders. I think that is not the full story, or else we should be seeing demand on the issuance front. And do note that high yielders usually take the first hit on equity market corrections !
So much for the calm waters, I think some serious hysterics will break loose soon.
Leaving with the indicative prices ….. and any feedback on our potential new logo ?
2015 SGD Corporate Bonds
SGD 2014 Corporate Bonds