Weekly View: Factors Affecting U.S. Rates; Argentina’s Surprise

Kick off the week with PGIM Fixed Income’s view from the desk, which offers a concise snapshot of macro trends, rates, emerging market debt and more. 

The Fed's About-Face Complete Amid Dissent

August 2019

PGIM Fixed Income discusses market disappointment with the Fed’s 25 bp rate cut on July 31, 2019. Short-term yields rose amid reduced expectations for cuts. However, long rates declined, suggesting that the less-dovish-than-expected Fed could dampen inflation and growth over the long run.

The ECB Steps Toward September Easing

July 2019

In this piece, PGIM Fixed Income explores a package of easing measures the ECB will likely initiate in September 2019. In sum, a first rate cut in September combined with tiering is all but a foregone conclusion. A decision on asset purchases is now highly likely, but it may come only in December, depending on how quickly a consensus can be forged.

The Next Chapter in the U.S.-China Trade War

July 2019

With President Trump and President Xi agreeing to restart trade negotiations, our baseline remains that the both face compelling incentives to resolve the conflict. Trump needs a strong economy and a rising stock market leading up to the presidential election in November 2020. Xi has the dual of objectives of hitting his 6.0-6.5% growth target and avoiding further accumulation of debt and leverage in the economy. Given this backdrop, we see four scenarios as to how the trade talks might proceed over the next year.

 

The Fed Clears the Way for Cuts as the Market Seeks Even More

June 2019

Following the June 2019 Fed meeting, PGIM Fixed Income expects two rate cuts in the second half of 2019 — more than what the median Fed projection has penciled in, but less than the three cuts the market has been pricing in.

Letters from Kyiv

June 2019

In a recent trip to Kyiv, Ukraine, PGIM Fixed Income's priorities were threefold: Confirm the political outlook given the country’s political outlook; Assess the status of Ukraine’s IMF program and macroeconomic policies; Evaluate the fallout, particularly for the National Bank of Ukraine, from the ruling that invalidated the nationalisation of PrivatBank, the country’s largest private bank. Our findings from the trip reinforced our positioning views on Ukraine’s hard currency sovereign debt.

An Overdue Recalibration of the Credit Ratings for Mexico and Pemex

June 2019

PGIM Fixed Income discusses the dynamics that led our internal credit ratings on Mexico and Pemex below the average of the rating agencies, our outlook going forward, and how this view is expressed in our investment strategy.

 

3Q19 Outlooks and Reviews

Investment Opportunities Amidst Prolonged Economic Uncertainties

Increased trade tensions, market volatility and dovish federal policies have left investors with many uncertainties about the months ahead. PGIM experts cut through the noise in our latest quarterly outlooks. 

Transcript

First Hand Perspective on Sub-Saharan Africa 

May 2018 

As major central banks continue to withdraw policy accommodation, the sustainability of the external debt accumulated by frontier markets— particularly Sub-Saharan Africa—has come into question, prompting Giancarlo Perasso, Lead Economist, PGIM Fixed Income, to visit the region. In this video, Perasso provides his assessment of the fundamentals in Angola, Kenya, and Zambia and how our positioning aligns with these views.