FICC Focus

In this edition of All Options Considered, BI's Chief Global Derivatives Strategist Tanvir Sandhu is joined by Jennifer Welch, Chief Geo-economics Analyst. They focus on geopolitics and market volatility, with topics including the conflicts in the Middle East, oil politics and the US election.

Chairman Jerome Powell had opportunities at the May FOMC meeting to put interest rate hikes back on the table and surprisingly did not, says Ira Jersey, host and Chief US Interest Rate Strategist for Bloomberg Intelligence. On this Macro Matters edition of the FICC Focus podcast, Jersey is joined by associate US Interest Rate Strategist Will Hoffman to discuss the key takeaways from both the Federal Reserve and US Treasury Department’s May 1 policy announcements. The pair unpack the implications of the announced taper to the pace of Fed balance-sheet runoff, as well as deficit and Treasury-issuance trends over the coming months.

Loose financial conditions are helping to alleviate short-term stability concerns, yet medium-term vulnerabilities are rising as the result of less-optimistic monetary policy expectations. In this month’s EM Lens & Look-Through podcast, Fabio Natalucci, deputy director of monetary and capital markets at the IMF, and Jason Wu, head of the IMF’s Global Markets division, join Bloomberg Intelligence Chief EM Fixed Income Strategist Damian Sassower to share their views on underlying asset valuations amid the recent surge in financial market volatility. Natalucci, Wu and Sassower discuss global monetary policy, central bank divergence, foreign exchange carry, Chinese shadow banks and US private credit.

Inflation is holding stubbornly above the Federal Reserve’s target, throwing expectations for rate cuts into turmoil and playing havoc with housing and mortgage markets. On this Macro Matters edition of the FICC Focus podcast, host and Bloomberg Intelligence Chief US Rates Strategist Ira Jersey is joined by Erica Adelberg, BI’s chief MBS strategist, and Will Hoffman, associate US rates strategist, to discuss the current and future state of the MBS market ahead of the May FOMC meeting. Adelberg breaks down recent trends across the US housing market, as well as year-to-date performance drivers for the MBS sector. She also examines the structural demand implications of continued MBS runoff from the Fed’s balance sheet.

Credit markets sold off in the past month, across the board, on rate-cut delays being priced in globally, led by the Fed. It takes us to an interesting juncture where we ask if this has longer to go or is largely done, and how it affects various asset classes in its aftermath. In this episode of our Credit Crunch podcast, host Mahesh Bhimalingam, Chief European Credit Strategist at Bloomberg Intelligence, and Raphael Thuin, Head of Capital Markets Strategies at Tikehau Capital, discuss the global situation's effect on inflation and central bank policy, its impact on global credit and the challenges of taking a directional view after the selloff. They discuss rates, yields and credit spreads along with curve flattening, the euro weakness and their impact on credit.

Alternative investments have historically been available only to institutions and ultrahigh-net-worth individuals, but that may be changing. Yieldstreet Chief Investment Officer Ted Yarbrough says democratizing access to alternatives is the company’s mission. He joined Bloomberg Intelligence analysts Noel Hebert and Sam Geier to talk about sourcing deals, leveraging technology and the importance of education when combining illiquid investments with retail clients. Yarbrough also spoke to the disruptive potential of Yieldstreet’s digital-only platform and his long-term outlook for the business. That and more on this episode of Credit Crunch, part of the FICC Focus podcast series.

Part of being an active manager is not only looking for assets that have an edge, are mispriced or are the next hottest thing, but also learning to avoid pitfalls and blind spots when it comes to municipal credit. In this Masters of the Muniverse episode of Bloomberg Intelligence’s FICC Focus podcast, Ben Barber, director of municipal bonds at Franklin Templeton, joins BI analysts Eric Kazatsky and Karen Altamirano to discuss municipal active management and best defensive and offensive strategies.

Complexity and illiquidity are desirable features for Dan Zwirn, CEO, CIO and Co-Founder of Arena Investors. Zwirn talks about the benefits of the special situations strategy, his concern about concurrent asset bubbles, and how partnering with others can benefit the investment process. That and much more as he joins hosts Noel Hebert and Sam Geier, each of Bloomberg Intelligence, on this episode of Credit Crunch, part of the FICC Focus podcast series.

The US Treasury’s liquidity-support buyback operations aren’t quantitative easing by a different name, says Bloomberg Intelligence US Rates Strategy Associate Will Hoffman. On this Macro Matters edition of the FICC Focus podcast, Hoffman joins co-host and BI’s Chief Interest Rate Strategist Ira Jersey to unpack the drivers and implications of a tumultuous two-week period for the Treasury market. The pair discuss key economic developments, including the recent CPI surprise that sent yields soaring. They also dive into details of the Treasury’s upcoming buyback operations, as well as the biggest takeaways from the Federal Reserve’s March meeting minutes, including commentary on the evolution of the central bank’s balance-sheet policy.

In our latest FX Moment podcast, Audrey Childe-Freeman, Bloomberg Intelligence chief G-10 FX strategist, and Stephen Chiu, chief Asia FX and rates strategist, reflect on navigating the G-10 and Asia foreign exchange markets in 2Q, while awaiting a shift in US economic data, Fed easing expectations and the dollar's fortunes. Audrey acknowledges recent chatter about euro-dollar parity, but doesn't embrace the view for now as much bearish news is priced in already. Stephen confirms that dollar-yuan bulls remain at the mercy of a dollar move lower and PBOC support for now, while there are also relevant intra-Asia FX views to consider into 2Q.

This edition of All Options Considered is part II of the recording of the Bloomberg Volatility Forum 2024 held in London on March 19th. This is the discussion from the second panel on zero-days-to-expiry options (0DTEs) by David Cross, Co-Head of US options at DASH Financial Technologies, Henry Schwartz VP and Global Head of Client Engagement at Cboe Global Markets, JB Mackenzie, Vice President & General Manager at Robinhood and Zubin Ramdarshan, Head of Equity and Index Product Design at Eurex. The panel is hosted by Bloomberg Anchor Kriti Gupta.

Deadlines and ensuring the right parties are at the table are two crucial ingredients for successful mediations, according to Ken Feinberg, who was the Special Master of the Federal September 11 Victim Compensation Fund and has helped administer some of the most complex public crises in American history. He discussed mass tort’s intersection with Chapter 11 with Bloomberg Intelligence Bankruptcy Litigation Analyst Negisa Balluku (6:00). Prior to that, BI’s Noel Hebert and Phil Brendel discuss the risk-on euphoria in the credit markets, exemplified by half the US high yield universe now sporting spreads below 200 bps. The podcast concludes with Noel, Negisa and Phil reviewing ongoing bankruptcy and distressed situations, including Yellow, Genesis, Rackspace, Gol, WeWork, and Rite Aid (36:25).

New York City hasn’t fully recovered from the pandemic, and that leaves both the city and state concerned about future revenue to face any new economic contractions and market volatility. Thomas DiNapoli, State of New York comptroller, joins Bloomberg Intelligence’s Eric Kazatsky and co-host Karen Altamirano in this month’s bonus episode of the Masters of the Muniverse podcast to discuss aligning spending and revenue. This edition marks a slight departure from the previous slate of guests who have brought us perspectives on the market from the sell and buy sides and from data providers. As the economy potentially heads toward a more-volatile period, and with inflation proving to be anything but transitory, one of the largest issuers in the US muni market talks about risks and resiliency.

This edition of All Options Considered is the recording of part of the Bloomberg Volatility Forum 2024 held in London on March 19th. The first part is the opening speech by BI's Chief Global Derivatives Strategist Tanvir Sandhu on macro and volatility across markets. This is followed by the recording of the discussion from the first panel on VIX and option strategies by Pierre De Saab, Partner at Dominice, Tom Leake, Head of Solutions at Capstone Investment Advisors and Valeriu Trufas, Fund Manager at Atlantic House. The panel is hosted by Bloomberg Anchor and Acting London Bureau Chief, Anna Edwards.

Event risk will garner greater attention as the emerging-market election calendar heats up in May. In this month’s EM Lens & Look-Through podcast, Wells Fargo Global Macro Strategist, FX & Emerging Markets Aroop Chatterjee joins Damian Sassower, Bloomberg Intelligence chief EM credit strategist, to share his views on funding currency diversification as the EM carry trade remains alive and well. Chatterjee and Sassower discuss the propensity for currency volatility to mean-revert, debate the impact of China’s economy on the broader commodity complex, and assess the impact of a shallower US Federal Reserve easing cycle on EM interest rate expectations.

Philosophy, process, people and performance — that’s what Jim Fellows, co-president and CIO of First Eagle Alternative Credit, says underpins FEAC’s investment approach. Fellows joins hosts Noel Hebert and Sam Geier, Bloomberg Intelligence credit analysts, on this episode of Credit Crunch to talk through the value of culture, the evolution in direct lending, leveraged loans and CLOs, and why he wants credit to just be boring. They discuss mid-market lending, the right risk premium between direct lending and syndicated markets, and how the FEAC team leverages technology to complement the investment process. Credit Crunch is a part of the FICC Focus podcast series.

I think the Fed is extremely data dependent, if anything, too data dependent, says Anna Wong, chief US economist for Bloomberg Economics. In this Macro Matters edition of the FICC focus podcast, Wong joins host Ira Jersey, chief US interest rate strategist for Bloomberg Intelligence, to unpack the March FOMC meeting. The pair discuss the surprises and developments from the meeting, including revisions to the Statement of Economic Projections and their implications for the path of Fed policy. Revisions to longer-run rate expectations, intermeeting black swan events, thresholds for interest rate cuts, and risk cases to economic forecasts are also discussed.

Municipals are starting the year semi-flat, and the latest read on consumer prices won’t do much to alleviate the concern of market participants that performance could be stagnant for the foreseeable future. At the same time, there are still some areas of relative value, even though the absolute tradeoff from late 2023 has faded to a large degree. In the latest Masters of the Muniverse episode of Bloomberg Intelligence’s FICC Focus podcast, Eric Kazatsky and Karen Altamirano are joined by Jason Appleson, managing director and head of PGIM Fixed Income’s municipal-bond team. They discuss market dynamics, credit quality, election predictions and much more.

Credit markets had a strong six months of rally, particularly in spreads, although not necessarily in yields. Are credit spreads too tight, and is that supported by low defaults? Is that rally justified on expected rate cuts? In this episode of our Credit Crunch podcast, host Mahesh Bhimalingam, Chief European Credit Strategist at Bloomberg Intelligence, and Marina Cohen, Head of European High Yield at Amundi Asset Management, discuss the situation in credit and the specific challenges of portfolio management after a six-month rally. They discuss relative value across junk, high grade and loans, fund flows, defaults, rate cuts and yield-curve views in detail. Particular attention was also given to private credit markets and how they are interacting with public markets in terms of supply and defaults.

The distressed cycle is on the upswing as rates pinch post-pandemic borrowers, in the eyes of William ‘Tuck’ Hardie, Managing Director in Houlihan Lokey’s Financial Restructuring Group (3:30). He joined the State of Distressed Debt podcast team to talk liability management transactions, where we are in the cycle, and why the involvement of private credit and CLO investors may mean more persistent distress. Tuck also shares stories from his 20-plus years with Houlihan and speaks to the culture that has enabled the team’s success. Prior to that, Noel Hebert and Phil Brendel of Bloomberg Intelligence review renewed declines in distressed debt and the general state of the market. The podcast concludes with BI’s Negisa Balluku and Phil reviewing ongoing bankruptcy and distressed situations including Gol, WeWork, Yellow, Audacy and Spirit Airlines (1:11:50).