Latest news with #ExanteData
Yahoo
23-05-2025
- Business
- Yahoo
This chart shows why investors should be worried about the latest bond-market selloff
In the past, when bonds sold off, it typically was seen as a promising sign for stocks. It meant that traders were betting on a stronger economy. But not this time. My daughter's boyfriend, a guest in my home, offered to powerwash part of my house — then demanded money After 25 years, I finally asked for separate checks — and my friends iced me out. Did I do something terrible? This hedge-fund manager has made about 50% in each of the last two years. Here's his home run trade. My husband used my money to renovate his house. Will I now get half of his property in a divorce? My ex-wife said she should have been compensated for working part time during our marriage. Do I owe her? A selloff in global sovereign bonds has taken investors by surprise, although none of the issues investors appeared to be taking issue with are recent developments. While countries like the U.S. and Japan have carried heavy debt loads for decades, Moody's decision to strip the U.S. of its top-tier credit rating earlier this month appeared to set the selloff in motion. See: Investors are rattled by rising U.S. bond yield. They should be more worried about Japan. But one longtime currency strategist and economist recently spotted an alarming trend that helped to underscore exactly why this selloff has so many investors so worried. Jens Nordvig of Exante Data highlighted the recent breakdown in the relationship between the yield on the 10-year Treasury note and economists' expectations for economic growth two years out. 'The key point is this. U.S. (real) yields are spiking. But that is not the important part. The important part is that they are spiking while growth expectations are tanking. This is new, and much more concerning than the past yield spikes linked to strong growth and perceived hawkish delta in Fed policy,' Nordvig said in a post on LinkedIn, where he shared the chart. That would imply that bond investors are growing increasingly uncomfortable with the fiscal situation in the U.S. and the lack of political will in Washington to take steps to reduce the debt. The latest bump in Treasury yields coincided with the passage overnight of the Republican budget bill in the House of Representatives, but yields drifted lower in afternoon trading on Thursday as investors bought the dip in bonds and stocks. Bond yields move inversely to prices. The yield on the 10-year note BX:TMUBMUSD10Y was down 3 basis points at 4.550%. However, the yield on the 30-year bond BX:TMUBMUSD30Y has remained above 5%, around its highest level since November 2023. That might not seem like much on its face. But as Nordvig pointed out, with growth expectations souring and the Federal Reserve on the sidelines, it appears that the selling pressure on bonds could persist. If this is really about the so-called bond vigilantes aiming to tame U.S. deficit spending, addressing their concerns won't be easy. As Deutsche Bank strategist George Saravelos pointed out in a report recently shared with MarketWatch, changing U.S. fiscal policy is an arduous process. In Europe, it is much easier for governments to push through changes to their spending plans. 'The U.S. has an additional problem: whatever the Republican Congress decides to do with fiscal policy over the next few weeks, it will most likely be 'locked in' for the remainder of the decade,' Saravelos wrote at the time. 'The very difficult reconciliation process and the potential loss of a Republican majority in the mid-terms essentially leaves space for only one major fiscal event during the current Trump administration. Once this concludes, there will be very little that can be done to change the fiscal trajectory for the foreseeable future.' Randy Flowers, senior portfolio manager at Intelligent Wealth Solutions, believes bond yields could keep a lid on stocks for the foreseeable future. It's one reason he expects the U.S. market to remain rangebound in 2025. 'I think bond investors are back in control of the market, at least in the short term right now. When that happens, that's usually bad news for everybody involved, including equity markets,' Flowers said. 'We'll see if it continues.' 'Is this a good tax strategy or a sham transaction?' My mother wants to give me her home. I have a plan to avoid taxes. My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? Is now a good time to buy an iPhone? A 5-star fund manager is capitalizing on Trump's global market shake-up. Here's how. Morgan Stanley turns bullish on U.S. stocks. Here's why it says the market lows have already been made. Sign in to access your portfolio
Bloomberg
14-05-2025
- Business
- Bloomberg
Bloomberg Surveillance TV: May 14, 2025
- Jens Nordvig, CEO and founder at Exante Data - Wei Li, Global Chief Investment Strategist at BlackRock - Holly O'Neill, President: Consumer, Retail & Preferred at Bank of America - Bill Dudley, Bloomberg Opinion columnist and former President of NY Federal Reserve Jens Nordvig, CEO and founder at Exante Data, discusses Dollar strength and FX moves amid recent trade turmoil and a reshaping of the US economic landscape. Wei Li, Global Chief Investment Strategist at BlackRock, talks about her outlook for global growth, US investment, and inflation, as well as upside inflation risks. Holly O'Neill, President: Consumer, Retail & Preferred at Bank of America, discusses the state of the American consumer. Bill Dudley, Bloomberg Opinion columnist and former President of NY Federal Reserve, talks about his Opinion column on US-China trade tensions and the Fed.
Bloomberg
13-05-2025
- Business
- Bloomberg
Hedge Fund Insider Sees Dollar Rout as Biggest Players Eye Exit
As the founder of Exante Data, a bespoke Wall Street research firm tracking global money flows, Jens Nordvig regularly talks to the world's largest investors, from hedge fund managers and corporate treasurers to pensions and sovereign wealth funds. What he's hearing lately has him convinced that the dollar's rebound following the de-escalation of US-China trade tensions in recent days is little more than a blip.
New York Times
01-05-2025
- Business
- New York Times
The World Still Speaks in U.S. Dollars
The U.S. dollar has fallen about 9 percent in the past three months, according to an index that tracks its performance against a basket of major trading partners. Not since the 1970s has the currency performed so badly in a president's first 100 days. The drop isn't surprising. The U.S. economic outlook is far cloudier than it was on Inauguration Day, as President Trump's tariffs set the stage for slower growth and higher inflation. U.S. assets look far less attractive now. But could there be something more existential afoot? Questions are swirling about the dollar's global standing and whether after more than seven decades as the world's most important currency, it's on the cusp of shedding that status. Trump's policies and his threats to longstanding norms like the political independence of the central bank have prompted a rethink among investors about how much more exposure they want to have to U.S. assets. That skepticism looks likely to endure. 'Something is in motion that is irreversible,' said Jens Nordvig of the research firm Exante Data. There are obvious caveats. Just because the dollar is weaker now doesn't mean it has lost all its primacy. A sudden shift away from the United States still seems far-fetched because there are few places to go. 'The rest of the world is eager, if not desperate, to reduce reliance on the dollar as a payment and reserve currency,' said Eswar Prasad, a former official at the International Monetary Fund who is now an economics professor at Cornell University. Attempts to weaponize the dollar through policies like sanctions would be less potent, and having multiple sources of liquidity during times of stress could make for a less fragile global financial system, some currency experts say. 'The reality, though, is that there are no robust alternatives,' Mr. Prasad said. The euro is perhaps best positioned to eventually seize the opportunity created by Mr. Trump. It is a widely used and favored currency among central banks. There are now more euro-denominated safe assets available, as Germany and other countries increase spending. And the European Central Bank has also shown more willingness to serve as the region's lender of last resort, a crucial function for an international currency. When would the euro become a reserve currency? 'We're at the best position to become one in some years,' Luis de Guindos, the E.C.B.'s vice president, said recently. But there would have to be much more meaningful economic, financial and regulatory integration across Europe for that to happen. It would take time. Other alternatives like China's renminbi face even higher hurdles. Investors cannot transact freely in the country's financial markets because of capital controls, and the currency is heavily managed by the government — two insurmountable barriers to the Chinese currency assuming a more global role. Another idea that has gained traction is a shared currency issued by the so-called BRICS group of countries, which includes Brazil, Russia, India, China and South Africa. Already some of the participating countries, like Brazil and India, have backed off from the proposals following threats by Mr. Trump that they would have to 'wave goodbye to America' if they did so. Shifting away from the dollar presents as big of a challenge as trying to shift the world away from using English, said Stephen Jen, a currency expert who runs Eurizon SLJ Capital. 'People can bicker on whether French is more beautiful or German more precise, but none of that matters — when more people speak English, more will learn to speak English,' he said. 'Dollar liquidity is deep. No one administration can destroy the dollar, certainly not President Trump in 100 days.'
