Noah Wise, senior portfolio manager at Allspring Global Investments unpacks what trading desks and investors should take from this week’s US Fed meeting; how to capitalize on the recent interest rate volatility, and where his traders are finding hedging opportunities in European bonds.
- Us equities volumes are still low for the year but liquidity has improved week on week and is good for 2023.
- US investment-grade debt volumes are just below average for the year but bid-ask spreads are tight for the 8-month rolling average.
- Data: The main event will be Jackson Hole Aug 24 – 25. Q2 Earnings: Zoom, Nvidia, and Snowflake.
- US axe data, which is within normal ranges, indicates a higher proportion of selling versus buying in credit.
Europe and the UK
- Europe equities volumes are very low for year to date but liquidity is good for 2023 averages.
- Euro investment-grade debt volumes are extremely low but bid-ask spreads are tight for the year.
- Data: Eyes will also be on policymakers at Jackson Hole starting August 24 and earnings.
- EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer asks Vs bids in credit
- GBP axe data, within normal ranges, suggests much higher net selling Vs buying of credit