For most of the month, bonds traded at the high end of the price range as investors continued to fret that the muted Q1 economic activity might be the start of a trend rather than simply weather related. However, in the last few days of the month, those concerns abated with decidedly improved economic activity. […]
The Fixed Income markets were hampered by weakness in the municipal bond market, as bonds issued by Illinois and Chicago came under selling pressure due to pre-mayoral election jitters and by the seasonal uptick in new issue supply. The concern was that Mayor Rham Emanuel was at risk of losing to the Cook County Commissioner, […]
“The bond market still thinks the Fed is bluffing,’’ said Michael Kastner, managing principal at Halyard Asset Management. Inflation expectations set to ease Fed fears
February 2015 In a polar opposite of the scorching rally witnessed in January, 30-year bond yields soared last month, rising 50 basis points in the first three weeks before settling 43 bps higher. The change in the bullish tone of the market was entirely attributable to the employment report. Naysayers had been ignoring the robust […]
January 2015 The ad hoc monetary policy of the Global Central Banks and their “beggar thy neighbor” currency policies turned downright bizarre in January resulting in a sharp and unexpected rally in bond prices. On the morning of January 14th, the Swiss National Bank (SNB) shocked the capital markets by abandoning its exchange peg against […]
“Rates are way too low and investors have made a mistake in thinking the Fed would tighten policy at the end of this year or in 2016,” said Michael Kastner, managing principal at Halyard Asset Management. “We are going to see investors sell short-dated bond holdings and interest rates will move higher as they come […]
“Volatility always increases at the start of the year, but this time, we are really seeing people buying into the US bond market on the assumption benchmark rates will stay very low until at least 2016,” said Michael Kastner, a managing principal at Halyard Asset Management. Mr Kastner said such “aggressive” bond buying was “risky”. […]
Michael Kastner, principal at Halyard Asset Management, says the benefits of cheaper oil prices will more than offset a shakeout for the energy industry. “We still expect the Fed will raise rates and we could be at 1 per cent by the end of the year,” says Mr Kastner. Deflation fears blur interest rate outlook
December 2014 As we expected, volatility remained elevated in December despite holiday-abbreviated trading. As 2014 came to a close, investors were decidedly at odds over the growth prospects for the economy and the risk and reward inherent in the capital markets. The growth bulls, with whom we include ourselves, believe that evidence abounds that growth […]
November 2014 November witnessed a barrage of better than expected economic data that ordinarily would have pushed interest rates higher. Instead, rates fell as bond prices rallied. In evaluating what went wrong, the obvious culprit is our misjudgment of the demand for U.S. Government securities. We anticipated that the steadily improving economic backdrop would have […]