Bond bubble: special focus


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Euromoney's latest coverage and choice pickings on bond markets:

Municipal bonds: Muni market braced for fallout from Detroit
July 2013
Potential bankruptcy would be largest in market’s history; Observers divided on contagion risk.

Rising rates: Interest rate risk focus for US banks
July 2013
Fed stress tests likely to make risk public; warnings of impact on securities portfolios.

Capital markets: Pricing keeps Latin American issuers out of market
July 2013
The changing appetite for Latin American credit is shown by data from EPFR. Emerging market-dedicated bond funds lost $2.64 billion in outflows during the week that ended June 19.

Africa’s wings clipped as pockets of uncertainty re-emerge – ECR Q2 2013 results
July 2013
The southern continent’s risk build-up is underlined by falling scores for South Africa and Zimbabwe, but many other African bond issuers have resisted the downturn.

US: Fed sows havoc for risk managers
July 2013
A string of Fed announcements and decisions has baffled US markets and bank decision makers.

Seven reasons why you don’t need to worry about Portugal
July 2013
Portugal is a ‘red herring’ to assess whether the eurozone crisis is about to blow-up again. Its economic and political landscape provides plenty of reasons for cheer, rather than fear.

Fears revive of Portuguese PSI
July 2013
The immediate panic over severe strains in Portugal’s coalition government in reaction to voters’ austerity fatigue is raising fears beyond a delayed restoration of market access.

Rattled retail buyers ditch bonds for loans
July 2013
Retail investors fled the credit markets during June, following the jump in US treasuries amid fears over Fed policy. But life insurers and pension funds, spotting desperately needed higher absolute yields, have been selectively buying.

Meet the contrarian bond market bulls as summer volatility beckons
July 2013
Some credit managers are predicting a market rally, at least in the short term, as the recent market sell-off restores value in the bond markets.

Asia scores fall amid EM bond and equity sell-off
June 2013
Economists saw rising levels of country risk among Asian sovereigns in June as investors fled emerging market debt and equity markets, after the US Federal Reserve announced it will unwind its policy of quantitative easing (QE).

Renewed debt fears to put euro resilience to the test
June 2013
The euro has remained resilient amid the turmoil that has engulfed the financial markets in recent weeks, but its fortunes might be starting to turn.

Sovereign bonds: Portugal passes milestone on a difficult road
June 2013
The country’s recent sovereign bond might or might not amount to a return to full market access, but it is certainly a positive development. Its progress on its economy and the state of its banks is equally crucial.

Sovereign bonds: Italian 30-year bond caps periphery rally
June 2013
Big deals come thick and fast from the EU periphery; Italy monitors US dollar market.

Asia DCM is too hot to handle
June 2013
Asian bond issues are attracting levels of over-subscription that are taxing bankers already squeezed by inflation in bookrunner numbers.

EM FX rout could turn into a bloodbath
June 2013
The stress witnessed in local bond markets during the past few weeks has driven emerging market currencies sharply lower, but the sell-off might only just be starting.

Gear up for emerging market local bond sell-off amid global deflation
May 2013
A sell-off in emerging market local currency debt is on the cards amid global deflation, a stronger dollar and rising US Treasury yields, say bearish analysts. If these predictions ring true it won’t be pretty for FX unhedged real money investors.

Rising volatility prompts Japan bond angst
May 2013
The Bank of Japan’s bond-buying plan is bedevilled by contradictions: it seeks to promote financial stability but has triggered inevitable bouts of market volatility. What’s more, the central bank wants low yields and greater inflation expectations. A new communications policy is needed, analysts say.

Inside investment: Central banks, credit bubbles – where it stops, nobody knows
May 2013
The central bank-driven global money-go-round has been turning ever faster since last summer. Now the Bank of Japan has turbo-charged it. So far, investors are enjoying the ride. But a bout of nausea cannot be ruled out.

Companies tapping bond market as first choice for M&A
May 2013
Mergers and acquisitions have undergone a paradigm shift as far as some are concerned, with bond issuance fast becoming the default funding source, but others say bank lending can still give debt a run for the money.

Sovereign bonds: Do markets need a risk-free rate?
May 2013
With concern growing over the credit risk embodied in many sovereign bonds, fixed-income investors need to think harder about how they assess risk. 

Debt capital markets: Turkish corporates delight in Eurobond access
May 2013
Koc, Arcelik tap dollar buyers; more deals in the pipeline.

SMEs: Germany’s fourth pillar?
May 2013
The SMEs that dominate the German economy continue to rely heavily on local relationship banks for finance. But the special circumstances of some companies and the eagerness of non-bank lenders to get into the market mean that funding through such instruments as Mittelstand-focused bonds, Schuldscheine and subordinated debt is becoming more prominent. 

Commerzbank unlocks covered bond market for SMEs
April 2013
Commerzbank issued a five-year €500 million covered bond backed by SME loans at the end of February – a landmark deal for the market given the atypical structure.

UK's retail bond market still out of reach for many SMEs
April 2013
Regulators hope they can transform the retail bond market into a regular source of funding for mid-caps - and the smaller firms.

Lenovo lays down the law for its bankers

April 2013
Few companies illustrate the new breed of Asian corporate titans as well as Chinese electronics firm Lenovo. It was founded in Beijing less than 30 years ago. Today, it is the world’s second-biggest PC vendor, with 27,000 employees and annual sales of around $30 billion.

Bond markets: The threat from rising rates
March 2013
Markets have felt the first tremors of the big bond market sell-off to come. They didn’t like it. As the date of the Fed exit from quantitative easing draws closer, the fear of a dislocation worse than 1994 grows.

Five years on, banks still inflict chronic pain on eurozone
March 2013
In light of the political turmoil in Italy affecting bond yields across the eurozone periphery, sovereign default risks have resurfaced lately. At the heart of the concern is bank stability, writes Jeremy Weltman.

European high-yield investors set for test of mettle
February 2013
Overzealous risk appetite, sloppy credit selection, herd mentality and tight yields despite a weak growth backdrop – fears are growing that the European high-yield market is sowing the seeds for a correction, despite the positive technicals of the market.

Off the record
February 2013
A bond trader sees a big crash coming in the bond markets when the Fed exits quantitative easing.

Floating rate notes see revival in US
February 2013
Defensive play against interest rate hikes spurs new FRN issuance.

US bond bubble: fit to burst?
January 2013
As the era of ultra-loose monetary policy and expansive quantitative easing enters its third year, government and investment-grade corporate bond yields have fallen to all-time lows, prompting the Bank for International Settlements to warn market participants that fixed-income assets now look perilously overvalued.

Forget the 'great rotation' – this is the 'great risk normalisation'
January 2013
Much has already been written about the speed at which money is flowing out of bonds into equities, but for some economists this isn’t merely a cyclical phenomenon but a structural shift and potentially the greatest of modern times.

Make way for the 'great rotation'
January 2013
According to a recent note by Bank of America Merrill Lynch, the great rotation is here. Bonds, quantitative easing and deflation are losing ground as risk appetite and growth, albeit tentative, pick up. 2013 will see equities, banks, value stocks and stockpickers rising up the ranks.

Bond bubble blues 
January 2013
Demand pressure weighs on fixed-income market.

Emerging market bonds: bubble trouble
January 2013
International money is flying into emerging market sovereign bond markets with frontier credits, such as Zambia, Mongolia and Bolivia, now boasting low yields. The jury is out on whether there is a bubble brewing in developing bond markets in hard currency. 

Outlook: Cautious optimism prevails in harsh macro-risk environment
January 2013
Bond markets trounced equities and M&A last year as central bank intervention and low global rates spurred a bull run in fixed income. However, as 2013 kicks off there are faint whispers of a pick-up in IPO and acquisition activity, so long as confidence is not undermined by an ugly mix of macro risks. That’s a big hope.

Can global markets keep climbing beyond the fiscal cliff? 
January 2013

Mongolia’s sovereign bond has teething problems
January 2013 Debut bond rebounded after political scuffle; Investment opportunities limited elsewhere
Four things that could upset the consensus in 2013
December 2012
Lower growth, yen weakness, Fed rate hikes and a jump in volatility are some of the contrarian risks for 2013, according to Bank of America Merrill Lynch analysts.

Mongolia bond sets off EM bond bubble concerns 
December 2012
Mongolia’s debut bond ran into trouble after a spat within the country's coalition government, underscoring politicial risks in the frontier market. The liquidity-fuelled demand for the country's bond brings to the fore the question of whether there is a bubble surfacing in emerging market debt, more generally. 

Credit boom bypasses funds and banks
September 2012
The credit boom is serving the real-money investment community well, but many supposedly smart-money hedge funds and investment banks are missing out on the party.

Is Germany the new big short?
June 2012
ECB President Mario Draghi’s game-changing bond program purchase plan has ignited a market rally, prompting the question: will the so-called bubble in Bunds soon burst? For the likes of Bill Gross and John Paulson, the great sell-Germany trade has to deal with a looming ban on naked shorts and will only pay off if the cash market cracks.

Debt markets: Has Latin America reached boiling point?
November 2010
Latin America’s debt market is setting new benchmarks, demonstrating the region’s rapid progress. But are things going too fast?