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  • IGM Credit, IGM FX and Rates

    China Insight: Liquidity Remains Tight, Despite Sizeable MLF

    China Insight

    PBOC on 15 September conducted a CNY600bn 1-year medium-term lending facility (MLF), more than enough to roll over the same type of facility (sized at CNY200bn) that expired in the same week. Despite the rate being unchanged at 2.95%, the facility size was large enough to stir up speculation over a possible re-emergence of a looser liquidity environment before and after the upcoming Golden Week holiday. However, what actually happened over the rest of the week suggested the surprisingly large MLF operation was mainly aimed at supporting market sentiment before the CGB auction held on 16 September. As soon as the auction was wrapped up, PBOC immediately showed its reluctance to let liquidity go any looser again. On 17 Sep, PBOC only conducted a small-sized 7-day OMO reverse repo, resulting in a re-emergence of net liquidity withdrawal.

    Topic Industry News

  • EPFR - fund flow & allocations data

    US Equity Funds benefit as risk appetite slips in mid-September

    Global Navigator

    With COVID-19 caseloads on the rise in Europe and key emerging markets, predictions for effective widescale vaccination slipping into 2Q21, last week’s technology sell off jolting market confidence and Sino-US tensions still running high, investor sentiment took a turn for the defensive during the second week of September. US Bond and Equity Funds absorbed a combined $33 billion, with the latter posting their biggest weekly inflow since 1Q19, while redemptions from Emerging Markets Equity, Europe Bond and Alternative Funds hit six, 12 and 25-week highs respectively.

    Topic Industry News

  • IGM FX and Rates

    Viewpoint: 2020 has already proved to be another record year for ESG issuance

    IGM FX and Rates

    Green bond issuance recovers after early 2020 pause & wider ESG sales pick up pace Green and sustainable/social bond issuance has exploded in very recent years as sovereigns, corporates and financials have all rushed to tap into investors' increasing care for the environment and climate change, and subsequent demands for their money to make a positive impact on society and the world at large. 10-years ago such issuance totalled just USD600mn globally, increasing to almost USD35bn in 2015, and in 2019 it topped USD200bn, according to our database, which tracks just international syndicated bonds. 2020 was expected to be an even stronger year for issuance, particularly with the sustainable bond market still in its infancy and seen having plenty of room to grow. For more read our Viewpoint Blog >

    Topic Industry News

  • Zephyr Portfolio Analytics

    Ryan Nauman's Weekly Recap: COVID-19 Market Edition 09.14.20

    Ryan Nauman's Weekly Recap: COVID-19 Market Edition

    The week ahead will be highlighted by the Federal Reserve (Fed) meeting announcement and Chairman Powell’s follow-up press conference. It is well documented that the Fed plans on keeping interest rates low for the foreseeable future as the central bank has laid their monetary policy on the table so there shouldn’t be much anticipation in terms of their rate policy. However, many may want to listen to their economic forecasts and expectations moving forward. As for economic data, the week contains multiple releases from the red-hot housing market. Additionally, retail sales for the month of August will be released which will be widely watched as the pace of sales slowed in July. Finally, consumer sentiment will be updated, which is an important indicator for consumer spending and the potential health of the economy. Ryan Nauman's Weekly Recap: COVID-19 Market Edition and subscribe to have it delivered to your inbox each week!

    Topic Industry News

  • IGM FX and Rates

    EM FX Viewpoint: Hungarian Forint at the crossroads after recent depreciation

    IGM FX and Rates

    CEE focus is on the HUF, which has been testing lows since April. This after Q2 GDP saw the steepest contraction amongst its peers of and CPI began to accelerate sharply in July, reducing the real rate on the HUF so that it is now the most negative it has been since January. For more read our EM FX Viewpoint Blog >

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Bond yields see upside risk as deleveraging in play

    China Insight

    Interbank liquidity tightening during August coincided significantly with the policymakers' introduction of a set of new regulatory measures targeted for property developers. PBOC and the Ministry of Housing and Urban-Rural Development (MOHURD) in mid-Aug had a meeting with major property developers in Beijing on the new rules set to monitor property developers' funding and financing outlook. The new rules include: (1) debt-to-asset ratio must not exceed 70% after contract liabilities; (2) net gearing must not exceed 100%; and (3) Cash-to-short-term debt ratio has to be not less than 1. Developers who fail to meet these requirements are required to submit an action plan by the end of Sep on how to reduce their debt levels within a year and meet all the above three requirements within 3 years. A significant fall in structured deposits and ordinary deposits since the beginning of the year (chart 1) suggests a lot of money has been poured into the real estate market again. That's reflected in the rapid rise in real estate FAI year-to-date (chart 2). Against this backdrop, policymakers have found it necessary to curb the pace of property developers' re-leveraging before it's too late.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    The Context 09.14.20

    The Context

    Read more from The Context and subscribe to have it delivered to your inbox each week!

    Topic Industry News

  • EPFR - fund flow & allocations data

    Swing to emerging markets continues in early September

    Global Navigator

    Summer in the Northern Hemisphere is winding down, with the official transition to autumn taking place in less than two weeks. But flows to Emerging Markets Equity and Bond Funds, which endured a chilly spring and early summer, continued to heat up. A week after they posted their biggest inflow since 1Q19, EPFR-tracked Emerging Markets Bond Funds took in another $1.8 billion during the week ending Sept. 9 as they extended their current inflow streak to 10 weeks and $13.5 billion while Emerging Markets Equity Funds posted their fourth largest inflow year-to-date.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    APAC US$ SUPPLY STATS: Issuance declines in August but by less than usual

    APAC US$ SUPPLY STATS Issuance declines in August but by less than usual

    The month of August is a typically subdued affair in the APAC US$ primary bond market, with only the month of December producing less issuance volume in the past couple of years. However, while supply did indeed decline sharply from what was a busy month in July, the US$28.577bn of total issuance (including Japan) that did materialize in August 2020 did at least mark a decent jump from those previous year's volumes. That in a month which continued to offer regional issuers across the rating spectrum attractive funding opportunities, supported by a keenness of yield-hungry investors to add inventory in the low rate environment, consistent with a broader appetite for risk.

    Topic Industry News

  • IGM FX and Rates

    EM Viewpoint: Low for longer Fed is broadly EM FX supportive, but fundamentals important too

    IGM FX and Rates

    The Fed's new policy framework, which suggests rates will stay lower for longer than other countries, could prove broadly supportive for EMs and riskier assets over the longer-term. However, for EM FX traders, there are, albeit, other various factors to navigate in the short-term. For more read our EM Viewpoint Blog >

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: USD/CNH Set to Bounce as Biden’s Lead Narrows

    China Insight

    USD/CNH reached as low as the 6.81 level at the beginning of this month. Recall, we said in the previous issue of this publication: "USD/CNH will be at 6.80 when 50% of a rollback of List 3 tariffs is fully priced and at 6.65 when 100% of a rollback is priced". Based on this assumption, we believe USD/CNH for now has already largely priced in a victory of Biden, who did say in early-August that he would remove the tariffs on China if he won the election in November. While FX players were still confident that Biden would defeat Trump in the election, we noted a few days ago Biden's clear lead over Trump as suggested by the betting odds (chart 1) no longer exists. As such, we won't be surprised if Biden fails to maintain his lead over Trump in some of the major polls before the first presidential debate takes place on 29 September. Because the market is very sensible, there is a good chance USD/CNH is already starting to price out some optimism over Biden's odds. Therefore, the risk of a bounce for USD/CNH from here should not be underestimated. In our view, 6.88-6.90 is reachable in the near term.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    The Context 09.07.20

    The Context

    Read more from The Context and subscribe to have it delivered to your inbox each week!

    Topic Industry News

  • EPFR - fund flow & allocations data

    Flows to Emerging Markets Bond Funds hit a YTD high

    Global Navigator

    Yield hungry investors who flocked to US junk bonds in the immediate aftermath of March’s pandemic-driven sell off steered over $3 billion into EPFR-tracked Emerging Markets Bond Funds going into September. That was the biggest weekly inflow for this group since mid-1Q19 and extended their longest inflow streak since 2H17. Attractive yields underpinned by stronger growth compared to most developed markets have prompted investors to look beyond the more troubled markets such as Turkey. While willing to stretch for yield within the fixed income universe, those investors remain unconvinced by the rally in global equity markets – except at the sector level – with US Equity Funds posting their ninth outflow since mid-June in the teeth of fresh record highs for key indexes. Equity Funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates continue to get a pass: they chalked up their 33rd inflow in the 35 weeks year-to-date. Overall, Equity Funds surrendered a net $1.5 billion during the week ending Sept. 2 that lifted their total since the start of February past the $240 billion mark. Balanced Funds saw a net $1 billion flow out and Money Market Funds $43.7 billion while Alternative Funds absorbed $585 million and Bond Funds $22 billion.

    Topic Industry News

  • EPFR - fund flow & allocations data

    Quants Corner - Fund Flows as Currency Allocator: Predicting the fall of the dollar?

    Quants Corner

    Can quantitative lightning strike twice? Srimurthy et al.[1] demonstrated the utility of fund flows as a predictor for equity markets at the country level. The model discussed in that paper uses flows into countries -- expressed as a percentage of assets invested by EPFR-tracked equity funds in those countries -- from funds that have a mandate to invest in more than one market, compounded over the latest available four weeks. What happens when you apply the same approach at the currency level? Interestingly, it works. The only change required is that the Eurozone be treated as one big country. To illustrate, we’ll look at the behavior of the US dollar over a period running from mid-June to mid-August. For the four weeks ending July 8, America’s currency enjoyed the highest cross-border equity flows among G10 currencies. Five weeks later, by August 12, the dollar had plummeted to the bottom bucket. This blog explores why this happened and what it might portend for the dollar in future...

    Topic Industry News

  • PSN Separately Managed Accounts (SMA) Data

    Facts Behind PSN Separately Managed Account (SMA) Data

    PSN

    Facts Behind PSN Separately Managed Account (SMA) Data

    Topic Industry News

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23 Sep 2020 , 15:00

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24 Sep 2020 , 11:00

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23 Nov 2020 , 08:00

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