A look into the word of Junk Bonds – ANZ Analysts at ANZ explained that the global junk bond market has had an impressive run.
Key Quotes:
“However, it hasn’t been an entirely smooth ride. On two occasions this year (March and August) US corporate high-yield bond yields have jumped 40-60bps only to resume their downward trend. But at 3.5% today versus over 8% in early 2016, it’s been quite the rally, and some are nervous that it may not be sustainable.”
“The traditional support factors remain in place: US growth is strong, as are equities, and volatility is low.
However, oil prices are rising and central banks are ever-so-cautiously sounding a little more hawkish. The market is an obvious first stop should there be a more generalised rise in yields and an associated spike in risk aversion. (These same yields hit nearly 20% in 2008).”
And of course it isn’t only the US high-yield corporate market where spreads are looking unusually tight: emerging market bond spreads are extremel..Read More →

Colcap, the benchmark index of the Colombian Stock Exchange, gained 0.51% on Thursday, trading at 1,441.97 points, due to Ecopetrol's gains after a profit-taking movement recorded on the eve.
Erika Baquero, an analyst at Alianza Valores, also mentioned that the oil price rebound helped to lift the mood in the Colombian stock market.
Meanwhile, Avianca closed up although a local court has ordered the airline to suspend the dismissal of eight pilots engaged in a strike.
The shares of Ecopetrol (+3.13%), Davivienda (+2.01%), Bancolombia (1.78%), and Canacol (+1.60%) are rising, while ETB (-1.80%), Sura (-1.17%), and ?xito (-1.09%) are falling.
Meanwhile, the locally traded U.S. dollar closed the day at 3,010.30 Colombian pesos, marking a 0.28% drop, due to the investors' skepticism regarding a tax reform in the United States.
Agust?n Vera, an analyst at Global Securities, said that investors question the likelihood that Congress would approve President Donald Trump's f..Read More →

Ibovespa, the benchmark stock index in Brazil, closed down 1.93% at 72,930.68 points on Thursday, giving back almost all of Wednesday's increase in the face of renewed doubts on the advance of the pension reform bill in the Brazilian Congress. The drop in the U.S. stock market amid uncertainty regarding the country's tax reform also hit Brazilian stocks.
“In the United States, the tax reform began to face hurdles in the Senate, which stated that it would happen only in 2019. That led the stock market to fall, reflecting on Ibovespa,” said Matheus Bantel, an economist at Floren?a Investimentos.
According to Sandro Dias, from DNAinvest, Ibovespa's fall was primarily driven by the political scenario regarding the pension system reform.
“At the end of yesterday afternoon [President Michel] Temer tried to make an effort, but the market and his allied lawmakers know that the pension reform cannot go through,” he said.
The locally traded U.S. dollar ended slightly lower aga..Read More →

NZD/USD headed to 0.6920 immeadiate target? NZD/USD meets resistance in the absence of further dollar weakness. US tax plan was the driver, but RBNZ official's comments are bearish for the bird. NZD/USD has fallen away from the highs made on the back of US Senator Bill Cassidy, a Republican from Louisiana, who confirmed that the Senate Republicans had planned to propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019.
Senate tax bill to delay corporate tax cut until 2019, dollar to deflate? Kiwi dips after NZ fin min says changes to RBNZ mandate could mean looser policy However, the Kiwi eventually dropped from 0.6980 to 0.6934 as the day's underperformer and despite the air of hawkishness from the RBNZ when 2019 inflation expectations picked up in their forecasts. Currently, NZD/USD is trading at 0.6943, down -0.15% on the day, having posted a daily high at 0.6956 and low at 0.6936. Secondly, Kiwi dipped after NZ fin min said changes to RBN..Read More →

NZ electronic card spending, October 2017: first thoughts – Westpac Analysts at Westpac offered their first thoughts on the recent Kiwiw data in NZ electronic card spending for October.
Key Quotes:
“Total spending: +0.4% m/m (last: 0.0%), +2.3% y/y Retail: +0.3% m/m (last: +0.3%, Mkt: +0.5%, Westpac: +0.6%), +1.2% y/y Core retail: +0.4% m/m (last: +0.1%), +1.8% y/y Spending on debit and credit cards eked out a small gain in October. However, the pace of growth in spending has slowed markedly this year as the housing market has cooled.
Retail card spending rose by 0.3%, following an upwardly revised 0.3% rise in September. However, these gains came after declines in six of the seven preceding months. Swings in fuel prices have had something to do with the volatility in card spending, but even core retail spending has been notably more subdued in recent months.
Spending on durables fell 0.5% in October, and is down by about 2% over the last three months. Durables spending is the cate..Read More →