FICC Focus

Heightened geopolitical risk is driving asset price fluctuations, as inflation and interest rate uncertainty demands increased focus on risk management and liquidity. Andrew Jackson, head of investments at Vontobel, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to assess portfolio exposure and investor sentiment across emerging market debt, as the asset class is well positioned to rebound when tensions de-escalate. Jackson and Sassower touch on inflation expectations, credit fundamentals and the policy outlook across EM following the surge in global energy prices.

Listen to this episode on Apple Podcasts and Spotify.

“In the past, I think a lot of times [sponsors] just handed the keys over if they were hopelessly insolvent,” industry veteran David Trucano says. “Now [the market has] basically written, through credit agreements, a call to the equity such that they can extract additional value through the capital structure and preserve value for themselves. And as a fiduciary, they’re required to do it.” Bloomberg Intelligence’s Phil Brendel and Noel Hebert sit down with Trucano (formerly of BlackRock, Centerbridge, Goldman Sachs SSG and Houlihan Lokey) to trace the trajectory of the distressed debt and restructuring markets over the last 25 years (7:40). From the dot-com bust and the WorldCom fraud to the rise of private credit and modern “creditor-on-creditor violence,” the conversation explores how liability management exercises have evolved and where the next distress cycle is brewing. The podcast concludes (1:19:05) with BI’s Negisa Balluku joining Noel and Phil to discuss the latest developments in Spirit Airlines, Telesat, Multi-Color Corp. Ardagh Group, and QVC Group.

Stephen Douglass, chief economist and a member of NISA Investment Advisors’ global investment committee, explains why he still sees the US economy as broadly consistent with a soft-landing path once the current oil shock fades, even though the war has complicated the timing of Fed rate cuts. He joined Ira Jersey, Bloomberg Intelligence’s chief US interest-rate strategist on this edition of Macro Matters. The two discuss Kevin Warsh’s arrival as Fed chair, why Douglass expects more incremental than revolutionary change at the central bank and why he thinks any attempt to pair balance-sheet reduction with lower policy rates would be difficult to execute. They also examine NISA’s preference for front-end Treasury steepeners over tight credit spreads, the risks posed by higher oil prices, the warning signs coming from the UK gilt market and why the Treasury Department is likely to keep leaning on bill issuance rather than meaningfully increasing coupon supply.

The UK is at the forefront of market headlines amid a political crisis and record gilt yields. In this episode of the Credit Crunch podcast, host Mahesh Bhimalingam, Bloomberg Intelligence’s global head of credit strategy, discusses how credit remains a safe haven in every crisis with Boris Okuliar, chief strategy officer and head of global diversified credit at Corinthia Global Management. They dig deep into the middle-market and private credit universe, covering deal profiles, spread premiums, typical leverage structures, fees and expected investor returns. They also discuss deal quality, expected holding periods, exit strategies and the role of traded credit within portfolios.

In this episode of FX Moment, Bloomberg Intelligence Chief FX Strategist Audrey Childe-Freeman and Jordan Rochester, head of FICC strategy for EMEA at Mizuho Bank, discuss how the evolving UK political dynamics leave sterling exposed in the near term via the potential revival of a negative fiscal premium. Jordan and Audrey also revisit the dollar-yen outlook following the recent Ministry of Finance/Bank of Japan FX intervention and discuss what scenarios could take the pair out of the 155.00-160.00 trading range, with a broadly weaker dollar outlook and/or joint FX intervention — with the US — the best contenders to trigger a sustainable push lower in the currency pair.