The best articles of the week on bond market development
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May 28th, 2021
Happy Friday!

Below are the top articles of the week covering bond market development. 

Please feel free to reach out directly if you find anything interesting. 

-Chris White
What if the Fed Can't Raise Interest Rates? Why Near-Zero is the New Normal - Barron's

Therein lies the conundrum. If the Fed tightens, the existing debt pile becomes more expensive to service, hampering economic growth. If the Fed doesn’t tighten, debt across households, companies and the government continues to grow, making it ever tougher for the Fed to move.


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Life Insurers Caught Between Rules and Risk in Hunt for Returns - Asian Investor

Low interest rates are making it difficult for life insurers to hit return thresholds, and capital charge costs on private assets are forcing them to head up the credit risk curve, say experts.

Full Article 

Options for Greening the Bank of England's Corporate Bond Purchase Scheme - Bank of England 

In judging how the CBPS might best support an orderly economy-wide transition to net zero we propose to follow three broad principles.

Full Article 

Quant Pioneer Dimensional Buys Bonds That Ray Dalio Hates - Bloomberg Quint 

Dimensional’s approach differs from discretionary investors who like to dissect an issuer’s business and model the monetary cycle, and also other fixed-income quants that fixate on factors like quality. It’s all part and parcel of the firm’s old-school philosophy that efficient markets reward investors for risk.

Full Article 

Chart of the Week: Get in Early - The Desk

Getting in early on a deal carries a significant advantage and newly released data from MarketAxess shows quite how much of an advantage that is. Even when a deal is missed in the primary market there is considerable secondary activity which can be engaged with shortly afterwards to lower the cost of investing.

Full Article 

ARCHIVE - Dear Buy-side. You Seem Very Concerned About Liquidity. Can I Suggest Paying for it? (May 26th, 2015) - Dan Davies

In short, as far as I can see, people in the market are prepared to do anything to improve bond market liquidity except pay for it.

Full Article 

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When Will Desktop Interop Cross the Chasm - Steve Grob

The potential for desktop integration is so huge in capital markets that figuring out where to start can be a daunting prospect. Understanding exactly how different users navigate their existing journeys through the multitude of applications they use is the obvious starting point, but this can be a resource hungry exercise.

Full Article 

Barclays Adds Streaming Firm Pricing to MarketAxess' Live Markets Order Book - PR Newswire

MarketAxess Holdings Inc. (Nasdaq: MKTX) today announced that Barclays (NYSE: BCS) has committed to become a dedicated market maker and is actively contributing streaming prices for US investment grade corporate bonds to the MarketAxess Live Markets™ order book for institutional credit markets.

Full Article 

It's a Trap! - BondWave

Through careful analysis of reported trades on TRACE and EMMA, we have identified at least six categories of probable and likely trade reporting errors. The six categories are: (1) Price Input Errors, (2) Yield Input Errors, (3) Side of Market Errors, (4) Trade Corrections Processed Incorrectly, (5) Trade Throughs, and (6) Illogical Price Patterns. It is the third category (Side of Market Errors) that presented the trap that we fell into when producing the original Q4 2020 dashboards

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Asset Managers to Hire Data Chiefs After Tech Re-Think - Funds Europe

Alpha’s report, ‘2021 Data Strategy & Operating Models’, found that the majority of firms are focused on implementing firm-wide data initiatives in recognition of a lack of enterprise-wide data management in many firms. As many as 68% of respondents said that data governance remained siloed by function within their companies.

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Inflation Hasn't Hurt Profit Margins, Yet. That's Good for Corporate Debt - Barron's

Junk-bond spreads have also tightened significantly over the past year, but haven’t yet reached post-crisis lows. And while high-yield companies have sold record amounts of debt this year, about two-thirds of that has gone to refinancing. The push to refinance has boosted levels at junk-rated and investment-grade companies alike, to the highest levels on record, she wrote. 

Full Article