Daily Archives: 9th January 2019

9th January 2019

Happy New Year?.. Oh yes!

Ain’t no stopping them… Another solidly positive session, leaving risk assets continuing with their rally. Who would have believed the Dax being up 3% already this year, especially given all the fears we have of a mounting slowdown in macro? The US/China trade talks reaching some kind of an agreement is the sole driver, because […]
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9th January 2019

Food for Thought Idea in USD AT1 Land | Bank Capital

HSBC 6% Perp 27 AT1 looks very attractive relative to STANLN 6.5 Perp 20 AT1

Macro background:

  • USD swap rates continue to widen especially in the front end and we continue to see the curve flattening
  • Global growth is slowing down but with potential sticky inflation (oil/commodities driven). Trade wars, protectionism and increasing geopolitical risks are going to create volatile moves in markets
  • EM currency and hard currency debt is coming into focus given the record level of issuance in recent years
  • Repricing risks in new issues and new issue markets being shut
  • Potential end of global easing and accommodation
  • Diminishing appetite for risky assets

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