Markt & Economie - For Professional Investors

Global Bond Bullets

27/apr/2017

Comments on the recent ECB meeting and global fixed income themes from the Global Unconstrained Bond team

  • As expected, the central banks of Japan, the eurozone and Sweden all left their key interest rates unchanged today.
  • The Swedish Riksbank kept the repo rate at -0.5% but, in a split vote, extended its asset purchase programme by SEK 15 billion for the second half of 2017. They noted that this extension of government bond purchases is to “support the upturn in inflation” in the accompanying statement. They also commented that “considerable uncertainty over economic and political developments abroad is also important for the stance of monetary policy”. We are long the Swedish krona based on improving economic fundamentals.
  • The Bank of Japan maintained its current yield curve control and asset purchase policies. It marginally revised down the inflation forecast for fiscal year 2017 to 1.4% (from 1.5%) while increasing growth forecasts for fiscal years 2017 and 2018 (to 1.6% and 1.3% respectively)1. We are positioned with a steepener on the long end of the JGB curve.
  • The European Central Bank kept its monetary policy stance firmly unchanged. Nevertheless, overall, recent economic data releases from the eurozone have continued to improve. During the press conference, President Mario Draghi noted that downside risks to economic growth have further diminished. However, as usual, he repeated his view that individual governments should press on with structural reforms. Given the currency bloc’s improving fundamental backdrop and the global reflationary environment, we believe that the ECB will fully taper its asset purchase programme next year.
  • Many bond investors focused on the political risk around the French presidential election over the past few weeks. The first round took place on Sunday (23rd April), with Emmanuel Macron and Marine Le Pen progressing to the final round on 7th May. General elections will subsequently take place in June.
  • While cognisant that the market is pricing in a relatively low probability of an eventual Le Pen victory, a win would have enormous ramifications for the euro, the eurozone and the European Union.
  • Another general election will now also take place in the UK on 8th June, news that was taken positively by the market, particularly the British pound. We currently favour certain British banks based on fundamentals, in particular subordinated debt, as well as select securitised assets.
  • Finally, elsewhere in Europe we have a range of diversified positions, including short duration positions in Hungary, the Czech Republic and Poland, a steepener in German rates and a long position in Italian inflation-linked bonds.

Source1: Bank of Japan

Marilyn Watson
Director, is Head of Global Fundamental Fixed Income Strategy

Op zoek naar meer onderzoek en insights?

BEKIJK ONDERWERPEN

This material is for distribution to Professional Clients and should not be relied upon by any other persons. The opinions expressed are as of 27th April 2017 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by BlackRock to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any investments named within this material may not necessarily be held in any accounts managed by BlackRock. Reliance upon information in this material is at the sole discretion of the reader. Past performance is no guarantee of future results. These materials do not constitute an offer to sell, or a solicitation of an offer to sell, securities in any jurisdiction or to any person. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. For distribution in EMEA for Professional Investors only, or “professional clients”, as such term may apply in relevant jurisdictions. In Japan, not for use with individual investors. This material is being distributed/issued in Canada, Australia and New Zealand by BlackRock Financial Management, Inc. ("BFM"), which is registered as an International Advisor with the Ontario Securities Commission. In addition, BFM is a United States domiciled entity and is exempted under Australian CO 03/1100 from the requirement to hold an Australian Financial Services License and is regulated by the Securities and Exchange Commission under US laws which differ from Australian laws. In New Zealand, this presentation is offered to institutional and wholesale clients only. It does not constitute an offer of securities to the public in New Zealand for the purpose of New Zealand securities law. BFM believes that the information in this document is correct at the time of compilation, but no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BFM, its officers, employees or agents. This document contains general information only and is not intended to be relied upon as a forecast, research, investment advice, or a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information does not take into account your financial circumstances. An assessment should be made as to whether the information is appropriate for you having regard to your objectives, financial situation and needs. If you do not wish to receive these communications in future, please reply to this email and your BlackRock relationship manager will remove you from our mailing list. BlackRock Investment Management (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: 020 7743 3000. Registered in England No. 2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. This information can be distributed in and from the DIFC by BlackRock Advisors (UK) Limited - Dubai Branch which is regulated by the Dubai Financial Services Authority (“DFSA”) and is only directed at 'Professional Clients' and no other person should rely upon the information contained within it. Neither the DFSA or any other authority or regulator located in the GCC or MENA region has approved this information. This information and associated materials have been provided to you at your express request, and for your exclusive use. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution would be unlawful under the securities laws of such. Any distribution, by whatever means, of this document and related material to persons other than those referred to above is strictly prohibited. In Hong Kong, the information provided is issued by BlackRock (Hong Kong) Limited and is only for distribution to "professional investors" (as defined in the Securities and Futures Ordinances (Cap. 571 of the laws of Hong Kong)) and should not be relied upon by any other persons. In Singapore, this is issued by BlackRock (Singapore) Limited (company registration number: 200010143N) for institutional investors only. For distribution in Korea for Professional Investors only (or "professional clients", as such term may apply in local jurisdictions). In Latin America, for use with Financial Intermediaries and Institutional Investors Only. If any funds are mentioned or inferred in this material, such funds may not have been registered with the securities regulators of Brazil, Chile, Colombia, Mexico, Panama, Peru, Uruguay or any other securities regulator in any Latin American country and thus, may not be publicly offered in any such countries. The securities regulators of any country within Latin America have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America. The contents of this material are strictly confidential and must not be passed to any third party. Issued by BlackRock Investment Management (UK) Limited (authorised and regulated by the Financial Conduct Authority). Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Registered in England No. 2020394. Tel: 020 7743 3000. For your protection, telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited.

CARS ID: ISGPS-0074.