FICC Focus

Elias Haddad, Senior Market Strategist at Brown Brothers Harriman, discusses the current state of the U.S. dollar and its implications for the economy. He highlights the recent weakness in non-farm payrolls and the unexpected firing of the Bureau of Labor Statistics Chief as key factors sustaining a bearish dollar narrative. They explore the Federal Reserve's shifting interest rate stance and its impact on the dollar compared to other currencies. Additionally, Haddad examines the euro's potential growth against the dollar, suggesting a bullish outlook.

Josh Zegen, principal and co-founder of Madison Realty Capital, shares insights into the evolving realm of real estate private credit. He highlights the importance of flexible capital in filling the financing gap traditionally occupied by banks. The conversation dives into the affordability crisis in residential real estate and the trend towards single-family rentals. Zegen also discusses innovative strategies for repurposing office spaces into residential units and explores nontraditional investment sectors, shedding light on their unique risks and opportunities.

Russ Brownback, co-portfolio manager at BlackRock, shares his expertise on global fixed income. He discusses the U.S. dollar's enduring status as the world's reserve currency and identifies promising yield opportunities in both U.S. and European markets. Brownback highlights a significant liquidity disparity in the U.S. economy, emphasizing the need for reinvestment amid impressive cash generation. He also suggests strategies to leverage elevated volatility in fixed-income markets, advocating for the sale of options to enhance returns.

Erica Adelberg, Chief Mortgage Strategist for Bloomberg Intelligence, dives into the evolving mortgage-backed securities market. She discusses the upcoming policy shifts, including GSE privatization and the adoption of VantageScore, which broadens mortgage access for first-time buyers. Adelberg highlights the changing dynamics of loans and the effects of the Federal Reserve's decisions on market stability. She also tackles the implications of new policies on veterans and the potential for increased refinancing as mortgage rates decline.

David Saitowitz, the Head of US Liquid Credit for ICG, shares his extensive experience in finance and discusses the evolving landscape of CLOs. He highlights the frequent repricings seen in 2024 and the challenges posed by recent market volatility. Saitowitz delves into strategies for growing the US liquid-credit business and the dynamics of CLO performance amidst changing economic conditions. He also addresses the rising competition from private credit and the significance of discipline in navigating credit investments. Tune in for insights and projections!

Peter Kent, co-head of Emerging Market Fixed Income at Ninety One, brings his 25 years of experience to the table in a conversation with Damian Sassower. They dive into the shifting dynamics between emerging and developed markets, exploring how U.S. monetary policy and tariffs influence investment strategies. Kent emphasizes the resilience of South Africa's economy and its investment potential. The duo also discusses the challenges of managing currency risk and the evolving role of the U.S. dollar in global markets.

Nathan Dean, a Senior Policy Analyst at Bloomberg Intelligence, dives into the intricate world of stablecoin regulation. He highlights the significance of the GENIUS Act and its implications for the financial system. Dean discusses the evolving landscape for stablecoins, the competition between private issuers and banks, and the anticipated changes in Treasury demand. He also emphasizes the need for proactive regulator engagement and explores how stablecoins could reshape global finance, integrating with existing payment systems and unlocking blockchain's transformative potential.

Ross Rosenfelt, a managing director at Oaktree’s Opportunities Group with expertise in restructuring, shares insights into today’s distressed debt landscape. He discusses how disqualified lender lists may misguide sponsors by overlooking constructive funds. The conversation touches on innovative liability management strategies and the importance of collaboration in restructuring. Rosenfelt also reflects on his career transition from law to finance, the ambitious market mood amidst economic challenges, and the complexities of recent bankruptcy cases involving significant debt.

US Treasury yields are the lowest among the G3+, once hedged back to US dollars. Ira Jersey, Bloomberg Intelligence’s US interest rate strategist, and Huw Worthington, his European rate strategy counterpart, take up the topic in this episode of the Macro Matters podcast. The analysts discuss central bank policy action and government bond markets in general. They also discuss why long-end yields have been more sensitive to fears of rising deficits than shorter-maturity bonds. Terminal users can view their note on how Treasuries are the lowest-yielding sovereign bond market, after the currency hedge, by clicking here.  The Macro Matters podcast is part of BI’s FICC Focus series.

Thomas Samson, a High Yield Portfolio Manager at Muzinich & Co., oversees a massive €4 billion portfolio. He discusses the results from Bloomberg Intelligence’s latest investor survey on credit markets and analyzes the strong recovery in high yield during the first half of the year. Thomas delves into dollar flows into euro-denominated assets, the effects of the trade war on market dynamics, and investor sentiment moving into the second half. He also touches on private credit trends and the implications for default rates.