Global Race to Tapering Ignites Hunt for Next Currency Winners
Jill Ward and Anchalee Worrachate, Bloomberg News Pedestrians use a footbridge with the skyscraper office buildings of the Moscow International Business Center (MIBC), also known as Moscow City, beyond in Moscow, Russia, on Sunday, May 2, 2021. Facing a rising wave of Covid-19 infections and a vaccination rate that isnât keeping up, the Kremlin is trying to contain the epidemic without alarming Russians. , Bloomberg
(Bloomberg) Global central banks are starting to wind down the trillion-dollar money printing machines set in motion to rescue their economies in 2020. Getting ahead of them is becoming this yearâs biggest currency trade.
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“Sentiment is driving breakeven rates higher,” said Bob Stoutjesdijk, a Rotterdam-based fund manager at Robeco Institutional Asset Management, adding that breakeven rates, while “overstrecthed on a fundamental level”, can rally further as the economy reopens.
Financial markets the world over have been signalling that inflation may mount a comeback after months of ultra-loose monetary policy. The UK has been at the forefront of the resulting global bond sell-off, fuelled by the pace of the British vaccine roll-out and a recent hawkish tilt by the Bank of England.
While the UK’s rate of consumer inflation has held below the bank s 2 per cent annual target for 18 months, economists expect it to accelerate to just below that goal this year. That is raising the possibility that central bank officials could opt to tighten their monetary stance.
(Bloomberg) Market-based inflation expectations in the U.K. rose to the highest level in over a decade.The so-called 10-year breakeven rate climbed 3 basis points to 3.48%, the highest reading since 2008. The gauge, which is derived from the difference between conventional gilts yields and those linked to inflation, has risen almost 50 basis points point so far this year.The repricing comes before the Bank of England meets to set policy on Thursday. It follows record demand at a 10-year inflation-linked government bond last week, a sign that investors are scrambling to hedge their portfolio against the prospect of rising consumer prices.“Sentiment is driving breakeven rates higher,” said Bob Stoutjesdijk, a Rotterdam-based fund manager at Robeco Institutional Asset Management, adding that breakeven rates, while “overstrecthed on a fundamental level”, can rally further as the economy reopens.Financial markets the world over have been signalling that inflati
SEI added Robeco Institutional Asset Management as one of the subadvisers of its $1.4 billion SEI Institutional Investments Trust Emerging Markets Equity Fund.Robeco replaced AllianceBernstein, a spokeswoman confirmed. SEI removed AllianceBernstein's frontier emerging markets equity strategy as…