Know What's Happening in Bonds
Know What's Happening in Bonds
Japan’s ultra‑loose policy fuels $435 billion yen‑funded carry trade, raising bond market risk
The Bank of Japan’s ultra‑loose stance has made the yen the world’s cheapest funding currency, enabling a carry‑trade that amassed roughly $435 billion between 2022 and 2024. A modest rate hike in March 2024 barely dented the trade, but markets remain wary that a sudden, aggressive tightening could compress spreads and force borrowers to repay yen‑denominated debt.
The Corpus Christi City Council approved a resolution to tap up to $410 million in future water revenue bonds, slated for issuance as late as 2027, to reimburse current cash outlays for critical water‑supply projects. The plan funds a $175 million containerized brackish‑water treatment plant, $38 million for groundwater rights, and $197 million for the Evangeline Groundwater Project, while revisiting a halted desalination effort. Drought‑driven Level 1 water emergency forecasts and recent rating downgrades underscore the urgency. Officials argue the diversified portfolio will secure long‑term water availability for the seven‑county service area.
Minutes from the Fed's Jan. 27-28 meeting laid bare a lingering divide over where to set the bar for further rate cuts. In Fed speak, "some" is larger than "several" which means the group of "some" officials that includes those with...
PFM announced a partnership with DebtBook to embed artificial‑intelligence capabilities into public‑sector treasury operations, leveraging PFM's Synario financial‑modeling platform alongside DebtBook's debt‑management suite. The alliance aims to automate cash‑flow, leasing and investment tracking, freeing municipal finance teams to focus on...
The Japanese Institute of Certified Public Accountants (JICPA) has proposed treating life insurers' government‑bond holdings as held‑to‑maturity, removing the need for impairment accounting when certain criteria are met. Under current rules insurers must record a loss if market value falls...
Equity volatility in the US is easing, opening the door for a near‑term rally in 10‑year euro swap rates that sit about 20 basis points below their January peak. Market participants expect a bear‑steepening move as the front end of...
Record bond issuance. Record trading volumes. Tighter spreads. More supply should widen spreads. Instead buyers are so hungry that more issuance actually improves liquidity and compresses risk premiums. This works until it doesn’t.
As for the markets, last week the Dow briefly reached the 50k milestone while the S&P 500 continued to hang out just below 7,000. The 10-year yield has been flirting with 4% again and the terminal rate for the Fed’s...
Industrial production rose 0.7% in January, outpacing the 0.4% forecast, and posted a 2.3% year‑over‑year gain. Utilities output surged 2.1% month‑over‑month, while mining slipped 0.2% and manufacturing climbed 0.6%. The index’s current level is at or below the start‑of‑recession threshold...
ASR Nederland N.V. held its Q4 2025 earnings call on February 18, 2026, presenting full‑year results and outlining progress on its multi‑year strategy. CEO J.P.M. Baeten highlighted stronger underwriting performance and a rise in net profit, while CFO Ewout Hollegien detailed improvements in...
This is the CLO market right now: Sellers: AI will destroy these businesses Buyers: Thanks for the yield Software is the largest sector in CLO portfolios globally. 10-15% concentration. Nearly half mature in the next 3 years. Someone here is wrong.
Busy UST auction schedule in the next eight days could finally slowdown the rally a bit and offer an opportunity. Brand new 20s ($16B) today, new 30y TIPS tomorrow ($9B), and regular size/schedule 2s, 5s and 7s next week.
Russell Investments Canada Limited announced the launch of five new exchange‑traded funds on the Toronto Stock Exchange, adding two fixed‑income products (HALO and RBND) and three multi‑factor equity funds (RQCA, RQUS, RQIN). The fixed‑income ETFs carry a 0.35% management fee,...
ECB yield caps give the illusion of fiscal sustainability, but it's just an illusion. A real shock like Russia's invasion of Ukraine shows high-debt countries have no money to help Ukraine. For the sake of Europe, the ECB needs to...
The US Treasury will publish its latest International Capital (TIC) data, showing foreign investors holding a record $9.36 trillion of Treasury securities. China’s holdings slipped to roughly $683 billion, the lowest level since 2008, while Japan remains the top holder with about...
Ulf Erlandsson is returning to Sweden’s Fourth National Pension Fund (AP4) as Senior Fixed Income Portfolio Manager for liquid credit, after nearly a decade on the hedge‑fund side. He founded the Anthropocene Fixed Income Institute, a climate‑focused research nonprofit, and...
The VanEck BDC Income ETF is yielding 12.3% as of 12 February, just below its five‑year high of 12.8% reached in April 2025. In contrast, the BofA Merrill Lynch US High Yield index has slipped to 6.6%, down from an 8.5%...
UK inflation eased to a near‑year low, with the CPI falling to 3% year‑on‑year in January 2026, down from 3.4% in December. The slowdown, driven by lower petrol, airfares and food prices, has revived expectations that the Bank of England...
The Liberal Democratic Party’s landslide victory in Japan’s snap election has steadied the government‑bond market, halting a sharp rise in long‑term yields. Foreign institutional investors, who had been offloading JGBs, have paused sales and begun modest buying. Domestic investors are...
The PIMCO Dynamic Income Fund (PDI) is trading at roughly a 12% premium to its net asset value, delivering a near‑14% yield and monthly distributions. While its strong distribution history appeals to income investors, the fund’s leverage and sensitivity to...
Business development companies (BDCs) have seen their share price to net asset value (NAV) ratios slip lower as investors anticipate reduced base rates and grapple with heightened software sector exposure. The average price‑to‑NAV now sits below 95%, reflecting a widening...
ICMA has published an open‑access guide to South Africa’s repurchase (repo) market, the ninth edition in its global series of market‑specific manuals. The guide outlines the market’s structure, collateral types, counterparties, infrastructure, and the legal‑regulatory framework. Funding came from Strate’s...
Vanguard’s Core‑Plus Bond ETF (VPLS) is an actively managed fund that targets investment‑grade bonds, Treasuries, and mortgage‑backed securities while holding modest amounts of foreign and high‑yield debt. Compared with its passive benchmark, the Vanguard Total Bond Market ETF (BND), VPLS...
U.S. Treasury yields edged higher on Tuesday, halting a recent rally as steady private‑payroll data reinforced expectations of a still‑robust labor market. The benchmark 10‑year yield closed at 4.06%, while the two‑year rose to 3.43%, reflecting market pricing of two...
U.S. Treasury yields opened modestly weaker on Tuesday after a volatile three‑day‑weekend, but steadied by mid‑morning. The 10‑year note rose to 4.06% before trading flat through the close, marking a calm finish despite earlier upside pressure. No fresh economic releases...
AMC moving to clean up its maturity wall. $2.5B package taking out 2027 notes (12.75%) and 2029 TL If it prices well, decently lower interest burden. $AMC
Bigben Interactive announced that its banking pool unexpectedly refused to honor a drawdown notice for the partial refinancing of its senior bonds, leaving the company unable to execute the planned €43 million partial repayment on the February 19 maturity date. The...
Loomis Sayles’ Credit Analyst Diffusion Indices (CANDIs) survey shows analyst optimism at its highest in several quarters, driven by stronger profit margins and declining leverage across most industries. Margin expectations rose sharply for both services and manufacturing, while leverage fell to...
Fed governor Michael Barr's latest speech contains 1) A short part on the current policy outlook. The key guidance: "Based on current conditions and the data in hand, it will likely be appropriate to hold rates steady for some time." 2) A...
AI cos and data centers are expected to issue $220 billion of debt this year, making up 15% of JPM's high-grade bond index (and making them bigger issuers than banks) https://t.co/LPkxfJGhNK
U.S. Treasury bonds extended last week’s rally by a few basis points in early domestic trading, though the advance faded later in the session. Market participants attribute part of the prior week’s rise to defensive positioning ahead of a three‑day...
I think I might be the only person in the world who still hates US Treasuries here. $TLT is just another lower high imo until proven wrong.
SwapsInfo reports a 46.1% jump in interest‑rate‑derivatives (IRD) notional to $536.5 trillion in 2025, with trade count rising 22.9% to 3.3 million. Short‑dated contracts dominate, representing 71.5% of IRD notional, while cleared transactions account for 86.6% of total notional. Swap execution facilities...
Fitch downgraded John Fitzgibbon Memorial Hospital in Marshall, Missouri to a “D” rating from “C” and withdrew its issuer and bond ratings after the hospital defaulted on required debt payments. The default concerns principal and interest on 2010 bonds, and...
Legal & General Investment Management will keep its catastrophe‑bond exposure despite recent spread compression. The firm’s portfolio, estimated at a minimum of $400 million, remains in diversified multi‑asset funds while it waits for more attractive entry points. Turner and Dietz note...
In a recent InsuranceAUM interview, Chris Gudmastad, Head of Private Credit, discusses the growing convergence between public and private credit markets. He highlights how blended financing structures are blurring traditional asset class boundaries and reshaping investment opportunities. The conversation underscores...
"The Federal Reserve has cut rates only a handful of times when nominal growth was greater than 8 per cent and most of those instances were in the 1970s." Richard Bernstein @RBAdvisors in the FT https://t.co/vzNnkKmGpY
New US deficit and growth projections ""suggest a quiet period ahead for bond vigilantes and others who hand-wring over the unsustainable nature of the US debt and the inevitable market revolt – the Godot for which they have waited impatiently...
Underwriting spreads for municipal bonds rose again in 2025, reaching an average of $4.30 per $1,000, up from $4.23 in 2024. Negotiated‑deal spreads increased to $4.64 while competitive‑deal spreads fell to $1.78. The uptick coincides with record issuance volumes—$586 billion in...
Big mistake is assuming move in rates is about current economic data. Reaction to ADP a good example
Low-debt countries like Germany are hopelessly outnumbered at the ECB. That's why ECB policy is inexorably drifting to help high-debt countries at the expense of low debt ones. So no surprise BuBa President Nagel supports Eurobonds. Going with the flow......
The episode examines a REIT's high‑yield bond, which trades above 7% with a 340‑basis‑point spread despite solid market fundamentals and improving leasing. Management is actively selling $280‑300 million of assets, using proceeds to cut debt and potentially buy back bonds, positioning...
Almost 90% of global public bonds trade at a yield lower than 5%: Apollo's Torsten Slok. "With inflation at close to 3%, this means that investors in public fixed income only get a 2% real return each year." https://t.co/oCUWfCIGpn
Disappointing UK jobs data and German ZEW expectations is helping the $USD extend its gains today. Robust reception to Japan's 5yr bond sales helped ignite JGB rally and lifted the $JPY. Softer US rates and heavier equities after US holiday....
Challenger Life, an Australian life insurer, reported that its catastrophe bond and broader insurance‑linked securities (ILS) investments outperformed the Plenum CAT Bond UCITS Fund Index over the last six months. The cat bond segment delivered a return above the index’s...
"38% of FMS investors believe that, all else equal, the nomination of Kevin Warsh as the next Fed Chair will likely lead to higher US Treasury yields and a lower US dollar." - BofA Global Fund Manager Survey https://t.co/5m0L3ZjRg1
Asia‑Pacific private credit is entering a rapid expansion phase, with issuance projected to rise from $59 billion in 2024 to $92 billion by 2027. Industry leaders such as SC Lowy and Moody’s cite digitalization, the energy transition, and infrastructure needs as primary catalysts,...
India’s corporate funding is increasingly sourced domestically as the yield gap with US Treasuries narrows to about 2.5%, eroding the cost advantage of foreign‑currency debt. Deepening private‑credit markets now finance even near‑investment‑grade borrowers, exemplified by a recent $3.4 billion rupee‑denominated deal....
The yen edged higher in thin Asian trading as the Japanese currency modestly strengthened. The latest five‑year JGB auction posted a bid‑to‑cover ratio of 3.10, the first rise since September, indicating easing election‑related stress. RBA minutes reinforced a tightening bias...
U.S. Treasury rates slipped across the curve in the week ending February 13, 2026. The 30‑year yield fell 0.16%, while the benchmark 10‑year dropped 0.18% to 4.04%. The 3‑year note settled at 3.43%. The declines reflect modest easing in market...
Five private credit firms just provided $1.4B for a software buyout of OneStream valued at $6.4B. Same week everyone’s asking whether AI will make these companies obsolete. The market is telling you software is at risk. The lenders are telling you...
