Fixed Income Strategist
Chris has quietly slipped into premature middle age - when not strategising about bonds, he has an enthusiasm for running, golf and (inexplicably) gardening. He has just finished his first marathon: a 26.2-mile triumph of determination over common sense.
By Christopher Jeffery - November 29, 2017 5 mins
In pricing fixed income securities, a lot hangs on the difference between the mean, median and mode. Markets reflect a probability-weighted average of potential outcomes (i.e. the mean); policymakers typically focus on the single most-likely outcome (i.e. the mode). Thinking carefully about the difference has important implications for how we view interest rate risks.
By Christopher Jeffery - October 05, 2017 4 mins
Quantitative easing is a bit of a puzzle. It doesn't work in theory, but appears to have worked well in practice. Should we be worried as that process now edges into reverse with the advent of 'quantitative tightening'?
By Christopher Jeffery - September 12, 2017 7 mins
With the country saddled with high debt and unstable politics, Italian debt markets have persistently underperformed European averages for the last couple of years. This pessimistic narrative is definitely seductive but we believe it is dangerous to get sucked into an excessively negative outlook. The debt problems are chronic rather than acute, the politics are not obviously more unstable than usual, the ECB is being flexible with asset purchases, and the return potential could be greater than it first appears.
By Christopher Jeffery - August 08, 2017 5 mins
The filibuster is an important procedural device in the US Senate that makes it significantly harder to break the gridlock between Republicans and Democrats. President Trump argues that the "very outdated filibuster must go". But what is it? Why is it important? And what are the investment implications of throwing it on the Congressional scrapheap?
By Christopher Jeffery - July 06, 2017 4 mins
Low interest rates can be considered both a blessing and a curse. The blessing is that the government yield curve impacts discount rates used across almost all financial assets. The curse is that they incentivise changes in economic structures (e.g. higher debt) which, in turn, make low interest rates more entrenched. The blessing and curse of low interest rates is therefore that they are (probably) here to stay.
By Christopher Jeffery - May 17, 2017 4 mins
First it was Cristiano Ronaldo at the Euros, now it is Salvador Sobral at Eurovision. Portugal sits proudly on top of the sporting and cultural pile in Europe. Less obvious victories have been apparent in the rapid improvement in its fiscal arithmetic, and the significant outperformance of its bond market.
By Christopher Jeffery - May 10, 2017 4 mins
President Trump's approval ratings after his first 100 days in office make for grim reading. As markets question the ability of the White House to get its own way, we've seen a significant retracement in the "Trump trade" in both equities and fixed income. The President needs to become the cajoler, not just the commander, in chief to revive hopes of a large fiscal stimulus.
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