FICC Focus

Discover the intriguing dynamics of global market volatility, focusing on the elevated fluctuations in U.S. bonds, equities, and foreign exchange. Insights reveal how Federal Reserve decisions shape investment strategies. The podcast also delves into the sharp market declines of August 5th, particularly the Nikkei's drop, and discusses the potential shifts in investment approaches amid ongoing economic uncertainties and government changes.

David Philipp, a Partner at Crestline Investors with a rich background in structured equity finance, shares his insights on NAV lending. He discusses the impressive growth of this asset class amidst a challenging market characterized by elevated rates and inflation. The conversation explores how NAV lending evolved into a crucial financing strategy, particularly during the pandemic. Philipp emphasizes the importance of capital allocation, transparency among stakeholders, and the need for skilled teams in navigating modern investment challenges.

The biggest change to the Treasury market has been algorithmic trading, and the proliferation of high-frequency trading firms (HFTs) and principal trading firms (PTFs), those two are really the main market makers in the inter-dealer broker screens, says Dan Mulholland, senior managing director and head of sales and trading at Crews and Associates. Mulholland is joined by host, and Bloomberg Intelligence’s chief US rates strategist Ira Jersey to discuss evolutions in Treasury trading and market structure. The pair discuss the shifts in depth of book and liquidity intermediation throughout the market, in addition to the drivers and potential risks of the basis trade. They also discuss recent moves in the Treasury market and expectations around Federal Reserve rate cuts, as well as how they may evolve into 2025.The Macro Matters podcast is part of BI’s FICC Focus series. 

A collateralized loan obligation’s (CLO) reinvestment period is among the keys to the success for the asset class in the view of Eagle Point’s Founder and Managing Partner Tom Majewski. He joins Bloomberg Intelligence’s Noel Hebert and Sam Geier on this edition of Credit Crunch to walk through Eagle Points focus on the higher-risk tranches of a CLO structure, with an emphasis on equity. The discussion touches on holder concentration, the growth in covenant-lite loans, misconceptions around forced selling, synergies with private credit markets and much more.

Artificial intelligence is reshaping the world of municipal bonds, with predictive analytics, data-driven decision-making and automated portfolio management just some of the ways the technology is transforming public finance. In this episode of Bloomberg Intelligence’s Masters of the Muniverse podcast, hosts Eric Kazatsky and Karen Altamirano take a break from discussing the nuts and bolts of asset management and instead focus on the bits and bytes of how technology is applied to the municipal landscape. Joining us this month is Issac Kuofrom Parametric Portfolio Associates. Issac is a portfolio manager, technologist and painfully shy scratch golfer.

Jordan Sauer, Senior Vice President at Beach Point Capital Management, shares his expertise in distressed debt and credit agreements. He emphasizes the necessity for lenders to be 'hyper-vigilant' during liability management exercises. Sauer discusses how his legal background equips him to spot vulnerabilities in credit agreements. The conversation covers the low distressed ratio's impact on investor behavior and delves into the evolving landscape of leveraged buyouts, highlighting creditor engagement and negotiation in distressed scenarios.

With the US election having a clear result and credit markets enjoying a strong run this year, charting the course forward is a challenge. Will a Trump regime slow down Fed cuts and will the ECB continue on its previous easing course, and what will this mean for credit? Will stubborn US yields cause more divergence in credit until 1H25? In this episode of our Credit Crunch podcast, host Mahesh Bhimalingam, chief European credit strategist at Bloomberg Intelligence and James Turner, Co-Head of EMEA fundamental fixed income at Blackrock, discuss the state of credit and gaps across the US and Europe.They tackle relative value across credit in different currencies; junk and high grade; fund flows and supply; defaults and ratings; fundamental and curve views. They also detail the impact of elections across the US, UK and Europe.

As expected, the Federal Reserve cut 25 bps in this election week, not a surprise, but Jerome Powell wasn’t as hawkish as might have been expected. Bloomberg Intelligence Chief US Interest-Rate Strategist Ira Jersey is joined by Senior Government Analyst Nathan Dean to discuss the implications of the recent election cycle for the US economy and Treasury markets. They discuss the current state of executive policy uncertainty, and potential outcomes of various campaign promises, though Dean doesn’t think the debt ceiling is going to be an issue for the next four years. They also touch on potential changes in tax policies, fiscal budgets, and financial regulations.The Macro Matters podcast is part of BI’s FICC Focus series. 

The cyclically-driven bullish dollar narrative got another boost last week, with President-elect Donald Trump's expected pro-growth stance implying a policy mix weighted more to fiscal stimulus and less to monetary steps, which would help the dollar. It's also better positioned if Trump pursues tariffs. Host Audrey Childe-Freeman, Bloomberg Intelligence's Chief G-10 FX Strategist, talks to Dr Anna Wong, Bloomberg Economics Chief US Economist, about how the economy, the Fed rate outlook and the fiscal trajectory could affect our dollar outlook.Anna and Audrey touch on how US fiscal woes could impact dollar views via a worsening fiscal premium, though the dollar's role as the global reserve currency won't be challenged any time soon.

Geopolitical risk remains elevated, yet financial stability doesn’t appear to be a cause for concern as market practitioners turn their attention to year-end. Dr. Jason Wu, IMF assistant director of Monetary & Capital Markets, and Dr. Fabio Natalucci, CEO of the Andersen Institute for Finance & Economics, join Damian Sassower, EM Lens podcast host and Bloomberg Intelligence chief emerging market fixed income strategist, to discuss the growth and inflation outlook for both advanced economies and emerging markets across the globe. Wu and Natalucci touch on issues ranging from central bank stimulus and US dollar debasement to term premia expansion and the evolution of private credit.The EM Lens podcast is part of BI’s FICC Focus series.