EPFR Fund Flows

Negative yields tighten grip on fixed income universe in mid-3Q19 with mixed results for mutual fund flows

By Cameron Brandt 23 Aug 2019

Negative yields tighten grip on fixed income universe in mid-3Q19 with mixed results for mutual fund flows The second week of August saw the yield curves for two and 10-year US treasuries invert for the first time since 2007. The third week of August saw a major Danish bank offer qualified buyers a mortgage that will cost the borrower less than the face value to pay in full. With the unusual become normal in global debt markets, investors found their compasses spinning wildly going into the second half of 3Q19. As a result, they stuck to their ‘safety first’ strategy that has seen over $425 billion flow into EPFR-tracked Bond Funds so far this year while over $215 billion has flowed out of Equity Funds.

IGM Credit, IGM FX and Rates

China Insight: New LPR Mechanism is Bullish For Government Bonds

By Tim Cheung 23 Aug 2019

PBOC finally officially announced on 17th of August interest rate reform using the LPR (Loan Prime Rate) as a benchmark for new loans. As per the announcement, eighteen banks are selected as LPR quoting members and each of them are required to submit one LPR quote for a 1-year period and one for a 5-year period to the National Interbank Funding Centre (NIFC) on the 20th of each month.

LendersBenchmark™ - Financial Lending Analytics

Checking the Pulse of the Home Equity Market: A 2019 Midyear Update

By Rutger van Faassen 21 Aug 2019

EPFR Fund Flows

Quants Corner

By Sayad Baronyan 20 Aug 2019

Waking up in a house you own free and clear, with any mortgage fully paid off, is a dream for most of us these days. But what about waking up in a house that pays you to own it?

IGM Credit, IGM FX and Rates

China Insight: What Tactics Are Good in Dealing With Ongoing RMB Depreciation

By Tim Cheung 20 Aug 2019

On 13th August New York time, the US Trade Representative's Office announced delaying till 15th December the 10% tariffs on about half of the USD300bn of Chinese goods, that were originally scheduled to come into effect 1 September. Though the tariff delay should increase Beijing's interest in sending a delegation to Washington for another round of trade talks in September, we do not think a trade deal will be reached anytime soon. We reiterate our view that China is adopting "better-late-than-early" strategy and will continue to let the trade talks drag on till at least year 2020.

IGM Credit, IGM FX and Rates

The Context 08.19.19

19 Aug 2019

Inside this week’s edition of The Context, Financial Intelligence thought leaders discuss: Poland's FX Mortgage Loan Burden a Key Risk to The Zloty Prior to the 2007 financial crisis, there was an assumption the Zloty would maintain its appreciation, making mortgages denominated in foreign currency popular, particularly in the Swiss Franc. Yet this hasn't proved the case. The Zloty has in fact lost more than twice its value against the CHF since late 2008. The GBP Week - Bias is Bearish There are some suggestions that the prospect of a probable Sep no confidence vote from the (maybe) 'Remain' Labour Party could inspire a significant correction towards 1.24-1.25 near-term amid purported reduced demand for puts in the options market. However, even if we see those sort of levels we only see fresh sell opportunities. Read more from The Context and subscribe to have it delivered to your inbox each week!

EPFR Fund Flows

US yield curve inversion the latest wrinkle for mutual fund investors

By Cameron Brandt 19 Aug 2019

US yield curve inversion the latest wrinkle for mutual fund investors The second week of August saw yields on two-year US Treasuries exceed those of 10-year notes for the first time since 2007, a development viewed by large segments of the investing public and the financial industry as a clear-cut warning that the world’s largest economy will likely slip into recession during the next 18 months.

IGM Credit, IGM FX and Rates

China Insight: RMB Depreciation is Needed as Long as Trade Talks Drag on

By Tim Cheung 13 Aug 2019

Asian markets were shocked by Trump's announcement of the imposition of 10% tariff on the remaining USD300bn of Chinese starting, effective 1st September. The announcement came totally unexpectedly as nobody would think in advance that the face-to-face meeting between the US and Chinese trade negotiators would end up with further widening, instead of narrowing, of the gap between two countries.

EPFR Fund Flows

Quants Corner

By Vik Srimurthy 13 Aug 2019

Investors tend to use different playbooks for different market conditions. The tricky part lies in identifying when the market environment has shifted to the point the current playbook needs to be replaced. In this blog, the use of fund flows to detect one of the most important shifts – from a bull to a bear market -- is illustrated.

iMoneyNet - Money Market Fund Analysis

Money Market Funds Continue Growth Spurt

By Paul Adams 13 Aug 2019

The story around the above table is a positive one for money-market funds (MMFs). In the first full month of this year’s second half, U.S. MMFs continued a growth spurt that began almost exactly a year ago (last year’s second half). Total assets, all Taxable assets, and assets in six key MMF categories all increased in July, and the end-of-month totals for all funds and for all Taxable funds reached decade highs, as the story notes.

LendersBenchmark™ - Financial Lending Analytics

Why Benchmarking Matters - Make Informed Decisions & Improve Profit Opportunities

By John Sayre 13 Aug 2019

Topics covered in this webinar: Testing Pricing Strategies Optimizing Margin Opportunities Understanding Price Position Uncovering Volume Opportunities Using Market Data vs. Relying on Anecdotes

IGM Credit, IGM FX and Rates

The Context 08.12.19

12 Aug 2019

Inside this week’s edition of The Context, Financial Intelligence thought leaders discuss: Mattel Pulls Priced Trade – Rare But Not a First in The HY Market In an 8-K filing with the SEC on Thursday Mattel Inc announced it had terminated the $250m 6.00% 8yNC3 senior notes deal that priced the previous week and was scheduled to settle on August 8th EUR/SEK Bias Higher Ahead of CPI Risk A buy-dips preference is now becoming popular in EUR/SEK, with an eventual break above 10.8525 to spur another topside attempt. Asia Credit Insight: July US$ Issuance Highest Since Jan '18 APAC US$ supply for July closed out at a strong US$51.084bn and an increase of 31.9% from June’s volume. July’s issuance moreover marked the highest monthly total since US$52.585bn was sold in January 2018. Read more from The Context and subscribe to have it delivered to your inbox each week!

EPFR Fund Flows

Money Market Funds pull in over $100 billion in early August

By Cameron Brandt 09 Aug 2019

Money Market Funds pull in over $100 billion in early August Mutual fund investors opted for liquidity during the first week of August as they digested an unpleasant cocktail of weak German data, fears of a currency war between the US and China, hardening positions on Brexit and disappointment with the Fed’s 25 basis points cut in US interest rates at the end of July. Flows into Money Market Funds jumped to a 32-week high, exceeding the $100 billion mark for only the second time since EPFR started tracking them, while a net $24.9 billion flowed out of Equity Funds – their biggest weekly total year-to-date – and another $2.7 billion out of Balanced and Alternative Funds combined.

EPFR Fund Flows

Quants Corner

By Cameron Brandt 08 Aug 2019

The best strategy for navigating Hong Kong’s pro-democracy protests Hong Kong is experiencing the biggest political disturbances in over two decades. Initially peaceful protests in March against a proposed extradition law have escalated, with hundreds of thousands of demonstrators periodically marching through the Chinese special administrative region.  

IGM Credit, IGM FX and Rates

China Insight: Statement of Politburo Meeting Sounds Bullish For Bonds

By Tim Cheung 06 Aug 2019

President Xi hosted the regular Politburo meeting on 1H 2019 economic performance on 30 July. The policy statement pointed out increasing downward pressure faced by the economy in 2H19. Though the statement called for policy adjustments to ensure growth stability, it ruled out an immediate need for aggressive easing.