NDR Fixed Income Allocation Strategy July 2021 Update

The NDR Fixed Income Allocation Strategy, Positioning Update
BY BRIAN SANBORN

The NDR Fixed Income Allocation Strategy entered the month with increased allocations to U.S. Treasurys and U.S. Investment Grade. U.S. Long-Term Treasurys’ is now significantly above benchmark. The sector’s trend has improved, economic conditions are reversing from favorable levels, and the yield curve has narrowed from recent highs. The momentum of the U.S. stock market is no longer as strong as in previous months, which is less of a headwind for Treasurys. All these indicator changes are bullish for the sector.

Click the link below to read more about the strategy’s positioning.

Full strategy commentary: NDRFIAS202107071

Other posts

Thoughts From The Divide: The Door is Wide Open

BY JON WEBB
Last week, we flagged Bill Dudley’s abrupt change of mind: he now advocates immediate rate cuts. One might be forgiven for suspecting Bill had spent the week lobbying his old colleagues because the July 31st FOMC statement, and J Powell’s subsequent presser gave rates markets quite the boost. Of course, there were the usual Powell caveats: “If we were to see, for example, inflation moving down quickly - or more or less in line with expectations - growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting”. But judging from SOFR pricing, the market took Powell’s caveats as mere teasing. Powell’s presser comments suggested maybe 50bps of cuts by year-end, but Dec 25 SOFR pricing suggests at least 75bps. Read more →

Thoughts From The Divide: The Harvest

BY JON WEBB
Even in times of turmoil (see President Lincoln’s Thanksgiving Day Proclamation), fall is a time to give thanks. And what should we be more thankful for than the gift of shopping? Retail sales reflected “continued resilience in the American consumer” and one might think recent Fed surveys are indicative of a new sense of optimism? The Empire Fed Manufacturing Survey’s headline index “shot up forty-three points to 31.2, its highest reading in nearly three years, and the six-month outlook showed that “firms remained optimistic about future conditions”. The Philadelphia Fed survey was not quite as ebullient in its reading of the current environment, the headline index dropping from 10.3 to -5.5 (a section headline drily noting “Most Current Indicators Soften”), but, on balance, the sense of optimism was palpable and mirrored the Empire Fed, (“Most Future Indicators Rise”) with the future activity jumping “from 36.7 to 56.6 in November, its highest level since June 2021”. Read more →

Trump’s Bill Moves to the Senate, Flash May PMI Data on Deck

BY TEMATICA
Seeing an upswing in investment banking activity Read more →
Back to all posts →