BlackRock prefers European government bonds over US Treasuries
'We prefer euro area government bonds and credit over the US,' strategists including Jean Boivin and Wei Li wrote in a weekly note. 'Yields are attractive, and term premium has risen closer to our expectations relative to US Treasuries.'
The strategists see sticky inflation keeping the Federal Reserve from cutting rates far. They also said high fiscal deficits may prompt investors to seek more compensation to hold long-term Treasuries.
Treasuries sold off over the past week after posting their best monthly performance since February last month as traders priced in the prospect of Fed rate cuts. Some of those bets have been rolled back after the US reported strong employment data for June.
Within the eurozone, BlackRock prefers peripheral bonds such as those from Italy and Spain. BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
16 hours ago
- Business Times
HSBC cuts equities team in Germany as CEO Georges Elhedery continues revamp
[LONDON] HSBC Holdings is planning to let go of several staff in its Germany-based equities team as it continues to pare the investment banking division outside Asia and the Middle East. The London-headquartered lender is preparing to cut equities sales and trading jobs in the Dusseldorf office, according to sources familiar with the matter. The move is part of chief executive officer Georges Elhedery's effort to revamp the investment bank, the sources said, asking not to be identified discussing private information. Europe's largest financial institution has already culled dozens of analysts in its investment bank in the last couple of months and it has shut down its US, UK and European equity capital markets and M&A units. 'Equities sales and trading supports the growth of our Prime and Wealth businesses, facilitates equities distribution to the market and supports our global clients investing in equities in both developed markets and emerging markets,' an HSBC spokesperson said in response to questions about the cuts at the German unit. Since taking over as CEO last September, Elhedery has instituted a widespread overhaul of the bank that has involved creating four new divisions under what he has called his 'simplification' plan. He has also combined HSBC's commercial and investment banking units, while making operations in the UK and Hong Kong standalone businesses. BLOOMBERG
Business Times
17 hours ago
- Business Times
HSBC cuts equities team in Germany as CEO Elhedery continues revamp
[LONDON] HSBC Holdings is planning to let go of several staff in its Germany-based equities team as it continues to pare the investment banking division outside Asia and the Middle East. The London-headquartered lender is preparing to cut equities sales and trading jobs in the Dusseldorf office, according to sources familiar with the matter. The move is part of chief executive officer Georges Elhedery's effort to revamp the investment bank, the sources said, asking not to be identified discussing private information. Europe's largest financial institution has already culled dozens of analysts in its investment bank in the last couple of months and it has shut down its US, UK and European equity capital markets and M&A units. 'Equities sales and trading supports the growth of our Prime and Wealth businesses, facilitates equities distribution to the market and supports our global clients investing in equities in both developed markets and emerging markets,' an HSBC spokesperson said in response to questions about the cuts at the German unit. Since taking over as CEO last September, Elhedery has instituted a widespread overhaul of the bank that has involved creating four new divisions under what he has called his 'simplification' plan. He has also combined HSBC's commercial and investment banking units, while making operations in the UK and Hong Kong standalone businesses. BLOOMBERG
Business Times
20 hours ago
- Business Times
Europe: Shares settle lower as investors gauge mixed earnings, EU-US trade progress
[BENGALURU] European shares closed lower on Friday (Jul 25), as investors assessed mixed corporate earnings while awaiting updates on a framework of an EU-US trade deal that officials said could be reached as early as this weekend. Investors navigated the peaks and troughs around a potential agreement between the two large economies after a busy week of trade discussions with the US culminated in deals with Japan, Indonesia, and the Philippines. The pan-European Stoxx 600 index dropped 0.3 per cent to session lows after US President Donald Trump said there was less chance of an agreement with the EU, but pared losses after EU diplomats reiterated that a deal of 15 per cent duties on European goods was still in the works. The index last closed 0.2 per cent lower with most regional bourses in red, but on a weekly basis, the Stoxx index was on track for modest gains. 'It's hard to spin it as a good deal, but it would at least avoid much higher US tariffs and retaliation from the EU,' said Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics. 'The reported deal with the US would take a major downside risk off the table for now, weakening the case for further interest rate cuts.' Also weighing on stocks were elevated bond yields that got a lift after the European Central Bank's comments on Thursday tempered expectations of imminent interest rate cuts. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Meanwhile, corporate earnings were in full swing. Puma was the biggest percentage loser on the benchmark index, falling 16 per cent, its largest daily drop in more than four months. The sportswear brand cut its full-year outlook and reported weaker-than-expected quarterly results. London-listed sports retailer JD Sports slipped 0.7 per cent after Puma's results. On the flip side, LVMH gained 3.9 per cent after the French luxury group reported quarterly results, with analysts pointing to hopes on the horizon as the group said it saw signs of recovery in the Chinese market. The broader luxury index rose 1.8 per cent and was the top sectoral performer. Automobile stocks gained 1.4 per cent, boosted by Volkswagen's 4.6 per cent rise after the CEO of Europe's biggest carmaker said cost cuts must be accelerated in response to tariffs. Earlier in the session, shares took a hit on the company's slashed full-year sales and profit margin forecasts. Still, Traton, a truck unit of German automaker Volkswagen, fell 4.1 per cent. Carrefour gained 5.5 per cent after Europe's biggest food retailer reported its half-year results. Attention next week will turn to key events, including policy decisions from the Federal Reserve, earnings from several 'Magnificent Seven' companies, and Trump's Aug 1 tariff deadline. REUTERS
