DIRS.INFO The most relevant business & tech news

☆ Buying China 10-year government bond might not be a silly idea over the medium term: Strategist
▼ + stars: | 2024-04-23 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBuying China 10-year government bond might not be a silly idea over the medium term: StrategistBen Bennett from LGIM discusses why China is not un-investable.

Persons: Ben Bennett, LGIM Locations: China

For much of this year central banks have successfully pushed back against rate cut bets. "I believe the Fed will act rationally and begin to cut rates by the end of next year, but we can't rule out the scenario that the Fed is not going to cut rates and just let the ramifications of recession do what they do." Reuters GraphicsSHIFT NEARINGMarkets now fully price in a 25 basis point U.S. rate cut in May, having seen a 65% chance earlier this week. "There are now committee members in all three (banks) willing to talk about rate cuts next year," said Chris Jeffery, head of rates and inflation strategy at LGIM. "The ECB should begin to ease policy as soon as April 2024, with risks that a more sinister downturn in growth could warrant a rate cut as soon as March," he said.

Persons: Jonathan Ernst, ramping, It's, Nate Thooft, Goldman, Christopher Waller, Huw Pill, Yannis Stournaras, Chris Jeffery, we'd, Dario Perkins, Simon Harvey, Yoruk, Naomi Rovnick, Harry Roberston, Davide Barbuscia, Ira Iosebasvili, Saqib Iqbal Ahmed, Dhara Ranasinghe, Catherine Evans Organizations: . Federal, REUTERS, ECB, U.S . Federal Reserve, European Central Bank, Manulife Investment Management, Treasury, Graphics, Bank of England, Deutsche, Lombard, Traders, Yoruk Bahceli, Thomson Locations: Washington, United States, Europe, Goldman Sachs, Greek, Amsterdam, London

☆ Mining Industry Seeks to Define One Global Standard for Ethical Practices
▼ + stars: | 2023-11-23 | by ( Yusuf Khan | ) www.wsj.com time to read: +6 min

Customers and investors are increasingly considering mining companies’ ESG performance. Photo: douglas magno/Agence France-Presse/Getty ImagesMining giant Anglo American is one of the companies that have been involved in developing the new mining standard. Anglo American itself commits to at least nine different mining standards and is part of 17 industry associations, which all have their own requirements. The LME has been consulted on the development of the new mining standard. For now, work continues on the new mining standard, with the four associations still discussing what it should look like and how it would be governed.

Persons: Cynthia Matonhodze, ”, “, Tracey Kerr, douglas magno, Rebecca Campbell, ” Campbell, Campbell, Paul Hackett, Georgina Hallett, Yusuf Khan Organizations: Bloomberg, International Council, Mining, Metals, Gold Council, Mining Association of Canada, Miners, Business, Global Investor Commission, ING, Jubilee Metals Group, Hochschild, ” Mining, Agence France, Getty, White, London Metal Exchange, REUTERS Locations: Umguza, Zimbabwe, Dutch, Brazil, London, Brumadinho, American, ”

☆ U.S. recession risk is elevated next year without fiscal stimulus
▼ + stars: | 2023-10-31 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFiscal stimulus added over 2% to U.S. GDP this year, but recession risk is elevated next yearBen Bennett of LGIM says if the U.S. tips into recession next year, the Fed is likely to cut a total of 200 bps to help the economy.

Persons: Ben Bennett, LGIM Locations: U.S

Benefiting from the highest interest rates since 2008, pension funds are better funded to meet future payouts than they have been in years. Because insurers hold a lot less government debt than pension funds, favouring higher-return assets such as corporate debt, they are expected to sell some of the gilts they receive. It is selling 240 billion pounds of debt this year, a record, save for 2020-21. Helped by the pension fund demand of past years, Britain's average debt life is around 15 years, more than double the U.S. and Germany's. Britain has already started skewing its funding towards shorter debt this year, citing high borrowing needs, a move investors reckon also reflects declining pension fund appetite.

Persons: Dado Ruvic, BoE, gilts, Chris Jeffery, Lane Clark, Peacock, Barry Kenneth, Van Lanschot, Arif Saad, Craig, Owen Davies, LGIM's Jeffery, Yoruk, Carolyn Cohn, Dhara Ranasinghe, Toby Chopra Organizations: REUTERS, Bank of England, Legal, General Investment Management, Fund, Investment, Royal London Asset Management, Investors, Yoruk Bahceli, Thomson Locations: gilts, Germany's, Britain, Amsterdam, London

NEW YORK, Aug 23 (Reuters) - A recent spike in U.S. bond yields has come alongside muted expectations for inflation, a sign to some bond fund managers that economic resilience and high bond supply are now playing a larger role than second-guessing the Federal Reserve. Bond yields, which move inversely to prices, tend to rise in an inflationary environment because inflation erodes the value of a future bond payout. But while higher moves in bond yields in the last several months were often driven by investors pricing in higher interest rates as the Fed sought to tame rising inflation, expectations on the pace of price rises have moved lower in recent weeks. Long-term Treasury yields account for factors such as inflation expectations and term premiums, or what investors demand to be compensated for the risk of holding long-term paper. A recent string of strong economic data despite higher interest rates has strengthened investor beliefs that interest rates will remain higher for longer, even if inflation is tamed.

Persons: Jerome Powell, Jackson, Bond, ”, Calvin Norris, John Madziyire, Anthony Woodside, “, Aegon's Norris, Davide Barbuscia, Megan Davies, Anna Driver Organizations: Federal Reserve, Federal, Aegon Asset Management, Investors, Bank of Japan, BMO Capital Markets, Treasury, Securities, Reuters, Fed, Thomson Locations: U.S, America

Sterling initially dropped, reflecting disappointment after traders had priced in a 30% chance of another 50 bp hike. Longer-term gilt yields, more responsive to investors' perceptions about the economic growth trajectory, rose by the most in a month. Governor of the Bank of England Andrew Bailey attends a press conference for the Monetary Policy Report August 2023, at the Bank of England in London, Britain, August 3, 2023. Two-year gilt yields have risen by more than 120 basis points this year, more than double the increase of their U.S. equivalent. On Thursday, two-year gilt yields were down 5 bps in late trade, while those on 30-year debt rose 10 bps, the most in a month, to 4.66%.

Persons: BoE, Andy Burgess, Andrew Bailey, Sterling, we've, Bank of England Andrew Bailey, Alastair Grant, Jeremy Hunt, Carl Shepherd, they'll, juicier, Peter Goves, Kirsten Donovan Organizations: Bank, Bank of England, Monetary, REUTERS, Conservative, Newton Investment Management, Swiss, MFS Investment Management, Reuters Graphics, Thomson Locations: AMSTERDAM, LGIM, London, Britain, U.S

☆ Struggling US downtowns could take a cue from a small town in England that gave businesses rent-free space
▼ + stars: | 2023-07-26 | by ( Eliza Relman | ) www.businessinsider.com time to read: +3 min

The UK is experimenting with offering small businesses free rent to revitalize downtown districts. Several small towns in the UK have experimented with giving small businesses rent-free shop space over the last few years. Now it's vibrant, upbeat, colourful," Hope Dean, the owner of a plant shop that was one of the 10 businesses given free rent, told The Guardian. Some US cities have pursued similar downtown revitalization initiatives. Denver offered free rent and services valued at $20,000 to businesses willing to use empty space in the city's downtown, and San Francisco has offered free rent and grant money to pop-up businesses in its downtown.

Persons: Hope Dean, We're, Matt Soffair Organizations: Service, Legal, General Investment Management, Guardian, Times, Westminster City Council, Oxford, BBC, Denver Locations: Poole, Wall, Silicon, American, Westminster, London, San Francisco

☆ For markets, BoE communication is bottom of the class
▼ + stars: | 2023-07-17 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

U.S. Federal Reserve and European Central Bank expectations have meanwhile risen only marginally. For investors, clear communication from central bankers is crucial as they transmit their policy to borrowing costs through markets. The BoE was the first major central bank to start hiking rates. In contrast, they have long bet on more hikes than the BoE's main forecasts have implied are needed to tame inflation, rates futures show. BoE messaging, suggesting a reluctance to hike, has made it "very difficult" to own gilts recently, he said.

Persons: BoE, Toby Melville, Shamik Dhar, Andrew Bailey, Bailey, Schroders, Azad Zangana, Zangana, Liz Truss, Myles Bradshaw, Chris Jeffery, Jerome, Powell, Christine, Lagarde, it's, Craig, Yoruk, Dhara Ranasinghe, William Schomberg, John Stonestreet Organizations: Bank of England, REUTERS, Fed, ECB, of England, Traders, . Federal Reserve, European Central Bank, BNY Mellon Investment Management, Bank of England's, Investors, Graphics, of England's, Reuters, Asset Management, Thomson Locations: London, Britain, U.S, Dhar

SummarySummary Companies Investors seeking more information on thermal coal plansGlencore calls on shareholders to reject resolutionLGIM's Marks says 'fundamental lack of willingness to engage'LONDON, May 5 (Reuters) - Investors pushing for more transparency on miner Glencore's (GLEN.L) thermal coal production said its decision not to support a shareholder resolution on the topic showed a "fundamental lack of willingness to engage". Unlike its peers, Glencore mines and trades thermal coal, the fossil fuel used to generate electricity. It has said it plans to responsibly run down its coal mines by the mid-2040s, closing at least 12 by 2035. "There is a fundamental lack of willingness to engage," said Michael Marks, LGIM's Head of Investment Stewardship and Responsible Investment Integration. Just 24% of investors voted against Glencore's climate progress report at the miner and trader's 2022 AGM, with some citing slow progress in scaling back coal production.

Things are calmer now, but seven traders who spoke to Reuters, some heading rates desks at big global banks, said March's mayhem continues to reverberate, with fears of further volatility in traditionally stable bond markets muting activity. Investors rely on government bond markets to translate central bank interest rates into a stable benchmark for borrowing costs, from corporate loans to household mortgages. Yield shifts in government bond markets have become bigger - occasionally hitting 20 bps a day - since central banks started ramping up rate hikes last year to tame surging inflation. For some, March's turmoil is the latest sign of how post-2008 regulations constraining dealer balance sheets are affecting bond market functioning. Others noted markets were leaving behind an era of low volatility for good as rates rise.

☆ L&G's fund arm to back climate votes at U.S., Canadian banks
▼ + stars: | 2023-04-13 | by ( Simon Jessop | ) www.reuters.com time to read: +2 min

LGIM, insurer Legal & General's (LGEN.L) fund arm, which manages more than $1.5 trillion, said it was going public ahead of the banks' meetings as part of an escalation strategy after backing several climate votes last year. "Accordingly, we believe our support of many of these resolutions – depending always on the specifics of their drafting language and advisory or binding nature – is warranted." It would also back votes calling for a report on how the bank is aligning its financing activities with its 2030 targets at Toronto-Dominion Bank (TD.TO), Bank of America, Wells Fargo, Goldman Sachs, JPMorgan Chase and Morgan Stanley. "We believe detailed information on how a company intends to achieve the 2030 targets they have set... can further focus the board's attention on the steps and timeframe involved and provides assurance to stakeholders," LGIM said. ($1 = 0.7993 pounds)Reporting by Simon Jessop Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.

When bond yields fall, their price rises. But asset managers that run large government bond portfolios still expect bond yields to rise and say they are selling into the rally, expecting the European Central Bank and the U.S. Federal Reserve stay hawkish. Legal and General Investment Management (LGIM), the UK-based $1.6 trillion asset manager, is also reducing its exposure to government bonds, taking profits following the bond rally. As selling gripped bank shares on Wednesday, money market pricing suggested traders were leaning towards a 25 basis-point Fed rate increase next week. "We expect rates to rise," agreed Brian Nick, chief investment strategist at $1.1 trillion U.S. asset manager Nuveen.

☆ Analysis: Investors revive inflation trades as 6% Fed rate risk grips Wall Street
▼ + stars: | 2023-03-07 | by ( Davide Barbuscia | ) www.reuters.com time to read: +5 min

NEW YORK, March 7 (Reuters) - Spooked by a flurry of hotter-than-expected U.S. economic and inflation data last month, investors are reviving trading strategies that bet on a higher peak in interest rates. The recalibration in inflation expectations has led some investors to bet on a policy rate of 6% or even higher. Trading platform Tradeweb said it saw average daily volume in inflation swaps - derivatives used to hedge inflation risk - increase by 23% month-on-month in February. With higher inflation expectations lifting short-term bond yields higher than those at the longer end, some investors are wary of committing to debt maturities at the long end of the bond market yield curve. "The momentum in the economy is so strong that we may have to get into 2024 before the Fed funds rate peaks."

Japan's 10-year bond yield, trading at 0.4%, fell on Wednesday but is not far off its highest levels since 2015. Total holdings of foreign bonds by Japanese institutional investors, excluding Japan's $1 trillion reserve portfolio, reached $3 trillion at their peak. GOING HOMEThe implications of higher inflation and a possible end to ultra-low rates are not lost on Japanese investors. Still, anticipating a shift, Japanese investors sold a net 2.1 trillion yen ($15.94 billion) of foreign bonds in December, marking a fourth straight month of selling. According to Nomura, Japanese investors have been far more active buyers of global and overseas equities than domestic stocks in the last decade.

Search resuls for: "LGIM"

15 mentions found