January was a good month for corporate bonds. Investors are desperate for yield and the issuers want to be sure to take advantage of historically low rates. Even though half the world is scared of banks, it seems even they can borrow money pretty cheaply these days. My favorite bond issue of January is SABMiller, because its always good when someone is investing in beer production.
But in all seriousness, while this is all good news its hard to feel confident that the mood will last. The market is fickle and often irrational lately – if Merkel says the wrong thing tomorrow this call all go in the other direction. But here’s to hoping this is all a sign of good things to come in 2012.
“Because the markets are very volatile, more than what happened a month ago or will happen a month from now, what matters is what’s happening right now,” Kevin McPartland, director of fixed-income research for financial markets research firm TABB Group said.
And there’s always the allure of an almost-free lunch. “Funding is cheap so there’s a lot of incentive to tap the markets now … even if they don’t have anything to do with the money,” McPartland said.
Read the full article at ibtimes.com
Â Our 2012 Fixed Income Trading event is taking place on Tuesday January 24th. We have a great agenda for the afternoon that should shed some light on what the major players in the fixed income markets are thinking about liquidity, derivatives reform, the sovereign debt crisis and a whole host of other issues we’re currently facing. Here I talk to Greg Crawford about what you can expect from the event:
Jim Toffey, one of the co-founders of Tradeweb and general e-trading pioneer, is heading up a pretty fascinating new venture. Using ultra sophisticated analytics Benchmark has created a market data service that streams corporate bond and single name CDS prices every 10 seconds even when the instruments haven’t traded in hours (or days or weeks). See is believing:
Trade directly with your broker or look to a system that consolidates multiple quotes? There are benefits to each approach, but as things get more electronic in the OTC markets (with or without new derivatives regulations) this question will be front and center for many. My comments:
“It is important to have an individual brand and storefront that keeps active customers engaged,” says Kevin McPartland, senior analyst at Tabb Group. Because “sometimes if I know I want a Mac rather than a PC, it’s easier to go to the Apple store.” The latter is analogous to a buy-side customer seeking a specific trade or pricing online from one longtime or trusted bank counterparty.