Fixed Income

Oil markets will not be impacted by Venezuela in the near term, but by shocks from the Middle East. Maduro’s ability to stay in power in the short-term removes an avenue of oil supply relief. The same avenue is cut off if Trump is reelected. Geopolitical shocks in Venezuela could present tactical buying opportunities for Chile, Peru, and Colombia.

After this morning’s jobless claims number, we have now seen enough deterioration in our preferred labor market indicators to increase portfolio duration from “at benchmark” to “above benchmark”.

We calculate expected returns for several different US fixed income sectors with a focus on how municipal bonds stack up against the investment alternatives.

It’s status quo for the SIFI banks, as they don’t see consumer credit performance materially worsening from now-normalized levels and they are not meaningfully exposed to commercial real estate losses.

In this Insight, we look into the recent CPI release in Canada, and the possible implications for fixed-income market trades.