US markets ended stronger on Friday but closed out a losing week – S&P and Nasdaq gained 0.8% and 1.2% on Friday while the indices shed 0.6% and 0.7% during the week. All sectors ended the day in the green with IT and Utilities leading the gains, up 1.3% and 1.2% respectively. European bourses also gained on Friday while posting a weekly decline – FTSE was up 0.4% and CAC and DAX were up 0.3%. UAE’s ADX gained 0.8% while Saudi’s TASI extended it losses, down 1.1%. Brazil’s Bovespa extended its gains and was up 0.8%. Most Asian markets started in the green – HSI, Shanghai and Nikkei are up between 1.1-2.1% while Singapore’s STI is up marginally at 0.15%. US 10Y Treasury yields gained 3bp to 1.27%. US IG tightened by 0.8bp while the HY CDS spreads tightened 4.6bp. EU Main and Crossover CDS spreads tightened 0.1bp and 0.8bp respectively. Asia ex-Japan CDS spreads were 1.2bp tighter.
According to CNBC, Barclays equity strategists said, “With Fed tapering coming while delta variant keeps spreading, the transition away from liquidity/policy regime to more mid-cycle markets means we may experience a bumpier ride ahead,” while adding, “Market narrative may thus turn more cautious, as concerns about peaking growth rates, delta variant and policy mistake may prove headwinds, at a time when seasonality and technicals are unfavorable.”
Navigating The Bond Markets by Leveraging the BEV App | Aug 25
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New Bond Issues
- AIMS APAC REIT S$ Perp NC5 at 5.5% area
New Bonds Pipeline
- Perusahaan Pengelola Asset hires for $ bond
- Peabody Energy Corp. Issuer Credit Rating Raised To ‘CCC+’ From ‘SD’ By S&P On Lower Near-Term Maturities; Outlook Negative
- CF Industries Inc. Upgraded To ‘BBB-‘ From ‘BB+’ By S&P On Debt Paydowns; Outlook Stable
- Containership Owner And Charterer Danaos Corp. Upgraded To ‘BB-‘ By S&P; Outlook Positive
- Moody’s upgrades Deutsche Bank S.A.E. – Export Finance Covered Bonds
- Genting Group Companies Downgraded By S&P On Slower Recovery Prospects; Outlook Stable
- Tata Group Companies Placed On CreditWatch Positive By S&P
- Moody’s changes Hubei Science & Technology Investment Group’s outlook to positive; affirms Baa3 rating
- Estonia Outlook Revised To Positive From Stable By S&P On Strong Recovery; ‘AA-/A-1+’ Ratings
- Xylem Inc. Outlook Revised To Stable From Negative By S&P On Continued Deleveraging; Ratings Affirmed
- Outlook On Two China Asset Management Companies Revised To Negative By S&P; China Huarong Remains On Watch Negative
- RSA Insurance Group PLC Ratings Withdrawn By S&P At Issuer’s Request
- Ratings On Mitsui & Co. Australian Subsidiary Withdrawn At Parent Company’s Request By S&P
- Fitch Assigns Turkmenistan ‘B+’ IDR; Outlook Stable
- Moody’s assigns A3 and Aaa.mx ratings to Volkswagen Leasing México’s proposed certificados bursátiles
- Moody’s withdraws ChelPipe’s ratings, downgrades Chelpipe Finance DAC’s 2024 notes to B1
Term of the Day:
Quantitative easing (QE) is a form of unconventional monetary policy whereby a Central Bank purchases assets such as existing government bonds so as to pump money directly into the economy. This increase in money supply is meant to encourage financial institutions to lend more money to businesses and individuals. QE is regarded as a last resort to stimulate spending in an economy when a reduction in interest rates do not work alone. It also bears with it the risk of creating an inflationary pressure in the economy. Most major central banks in the world such as the US Fed, Bank of England, Bank of Japan and the ECB are all undertaking QE measures in a bid to help their respective economies fight the negative impact of the ongoing Covid-19 pandemic.
The discussion on reversing the quantitative easing policy will be the main theme of the Fed’s Jackson Hole symposium this Friday.
On Sri Lanka’s debt trebling to $15bn since 2015 – Nivard Cabraal, Sri Lanka’s State Minister for Finance and Capital Markets and former central bank governor
Top Gainers & Losers – 23-Aug-21*