Financials Credit Analyst

Hank Calenti, CFA

CreditContinuum

Credit

Executive Summary: The narrative has changed and there is little to stand in the way of further Treasury market strength near term. This should lead to US dollar weakness and may be Emerging Market risk asset supportive. Nonetheless, we suspect that Asia will remain driven by concerns that China is tightening which could constrain investor sentiment in this market.Trading volume-, Treasury issuance- and economic data-risks were no match for short-position unwinding, data reappraisal, and Japanese investor re-entry into the Treasury bond market over the last week. Treasury yields continued their retracement, posting their biggest weekly rally since August. Furthermore, after the worst quarter since 1980, Treasuries have gained around 1% this month, paring 2021 losses to about 3.3%. We may have seen a sell-the-rumor, buy-the-fact market event occur with respect to Treasuries and the better-than-expected March economic data set.The narrative has changed to one that is Treasury bond supportive. Fixed income markets are discounting lower economic growth and price expectations. Scenarios with a declining growth rate may be increasingly discounted in the Treasury markets. With GDP growth anticipated to tail-off over the next few quarters, sustainable wage growth may not materialize. Meanwhile, supply chain bottlenecks and rising producer prices may negatively impact corporate margins rather than consumer wallets. We elaborate on each of these themes within.Against this backdrop, there are limited economic announcements which could impact the Treasury market over the next few weeks. Meanwhile, Japanese investors may find buying US$ denominated bonds attractive after hedging the currency risk. This may be risk asset supportive going forward.  We review this inside.In the bank credit markets, March’s carry trade outperformance continued to unwind as shorter-duration bonds outperformed during the week. All recent higher coupon outperformers experienced large spread declines. Even the Turkish bank credit curve behaved in a manner consistent with other bonds globally, rather than trade at a discount. We identify the winners and losers.In China, while the immediate threat of Credit Armageddon may be lower, the ultimate game plan for China Huarong Asset Management is yet to be known. As such, the market may remain skittish while trading opportunities remain amongst the other asset management companies. Please see: <a href="https://www.smartkarma.com/compose/insight/50463/China%20Huarong:%20Contagion%20Creates%20Opportunity.%20Read%20more:%20https:/skr.ma/SmFJQ" target="_blank" rel="noopener">China Huarong: Contagion Creates Opportunity</a> for more details.US banks set a high bar for performance by announcing stellar investment banking and progressively improving core banking results last week. Then they signaled that they anticipate significantly higher interest rates later this year by hitting the market for record breaking amounts. Middle East- and Asia-headquartered banks may lead the headlines next week. Amongst major European names, only Credit Suisse is scheduled to provide final Q1 results on Tuesday, 20 April. For our thoughts, please see: <a href="https://www.smartkarma.com/compose/insight/50463/Credit%20Suisse:%20Skating%20on%20a%20Thin%20Layer%20of%20Capital.%20Read%20more:%20https:/skr.ma/rGLd5" target="_blank" rel="noopener">Credit Suisse: Skating on a Thin Layer of Capital</a>.Market Outlook: Already looking past upcoming spikes in inflation and job creation, the Treasury market is repricing for lower growth and lower rates over a longer time-period. This should be risk asset supportive as the US dollar finally weakens. The risk is that of impotent monetary policy and a constrained fiscal response in a shorter than expected business cycle.

Executive Summary: The narrative has changed and there is little to stand in the way of further Treasury market strength near term. This should lead to US dollar weakness and may be Emerging Market risk asset supportive. Nonetheless, we suspect that Asia will remain driven by concerns that China is tightening which could constrain investor sentiment in this market.Trading volume-, Treasury issuance- and economic data-risks were no match for short-position unwinding, data reappraisal, and Japanese investor re-entry into the Treasury bond market over the last week. Treasury yields continued their retracement, posting their biggest weekly rally since August. Furthermore, after the worst quarter since 1980, Treasuries have gained around 1% this month, paring 2021 losses to about 3.3%. We may have seen a sell-the-rumor, buy-the-fact market event occur with respect to Treasuries and the better-than-expected March economic data set.The narrative has changed to one that is Treasury bond supportive. Fixed income markets are discounting lower economic growth and price expectations. Scenarios with a declining growth rate may be increasingly discounted in the Treasury markets. With GDP growth anticipated to tail-off over the next few quarters, sustainable wage growth may not materialize. Meanwhile, supply chain bottlenecks and rising producer prices may negatively impact corporate margins rather than consumer wallets. We elaborate on each of these themes within.Against this backdrop, there are limited economic announcements which could impact the Treasury market over the next few weeks. Meanwhile, Japanese investors may find buying US$ denominated bonds attractive after hedging the currency risk. This may be risk asset supportive going forward.  We review this inside.In the bank credit markets, March’s carry trade outperformance continued to unwind as shorter-duration bonds outperformed during the week. All recent higher coupon outperformers experienced large spread declines. Even the Turkish bank credit curve behaved in a manner consistent with other bonds globally, rather than trade at a discount. We identify the winners and losers.In China, while the immediate threat of Credit Armageddon may be lower, the ultimate game plan for China Huarong Asset Management is yet to be known. As such, the market may remain skittish while trading opportunities remain amongst the other asset management companies. Please see: China Huarong: Contagion Creates Opportunity for more details.US banks set a high bar for performance by announcing stellar investment banking and progressively improving core banking results last week. Then they signaled that they anticipate significantly higher interest rates later this year by hitting the market for record breaking amounts. Middle East- and Asia-headquartered banks may lead the headlines next week. Amongst major European names, only Credit Suisse is scheduled to provide final Q1 results on Tuesday, 20 April. For our thoughts, please see: Credit Suisse: Skating on a Thin Layer of Capital.Market Outlook: Already looking past upcoming spikes in inflation and job creation, the Treasury market is repricing for lower growth and lower rates over a longer time-period. This should be risk asset supportive as the US dollar finally weakens. The risk is that of impotent monetary policy and a constrained fiscal response in a shorter than expected business cycle.  

Bank Credit Weekly: Narrative Change Pushes Carry-Trade Unwind as Treasuries Rally

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Bottom-Up

Edelweiss Financial Services / Equity Bottom-Up

We have highlighted across our prior insights that <a href="https://www.smartkarma.com/entities/edelweiss-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:15015:1" rel="noopener">Edelweiss Financial Services (EDEL IN)</a> is shifting its credit business towards a co-lending model as part of its broader shift to a fee based business model from a fund based business model.
In the upcoming reform agenda for PSBs under EASE 4.0 program, there is likely to be a push towards co-lending as per <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/psbs-to-push-co-lending-with-nbfcs-digital-agri-financing/articleshow/82021101.cms" target="_blank" rel="noopener">media sources</a>. Edelweiss, who has already partnered with various government-owned banks (public-sector banks or PSBs), is well-positioned to benefit from this.

We have highlighted across our prior insights that Edelweiss Financial Services (EDEL IN) is shifting its credit business towards a co-lending model as part of its broader shift to a fee based business model from a fund based business model.
In the upcoming reform agenda for PSBs under EASE 4.0 program, there is likely to be a push towards co-lending as per media sources. Edelweiss, who has already partnered with various government-owned banks (public-sector banks or PSBs), is well-positioned to benefit from this.

Edelweiss: A Beneficiary of Potentially Increased Adoption of Co-Lending by PSBs

Executive Summary: Light trading volumes, an issuance holiday and technical asset purchase expectations flattened the US Treasury curve during the week. Bank credit largely underperformed in what appeared to be a carry-trade unwind. All recent higher coupon outperformers experienced large spread declines. We do not expect this to continue as US growth and inflation expectations rise.We think this past week was an aberration, owing to thin markets, a lack of conviction pre-earnings season and concerns on the virus versus vaccine front. There is clear volume-, issuance- and data-risk for the market to contend with next week. We outline these within.Furthermore, we anticipate that market sentiment will revert to concerns regarding possible over-heating in the US economy, which in turn, would lead to a return of Treasury yield curve steepening. The sweet spot of long duration, low investment grade and BB rated bonds would revisit the market. This is a repositioning opportunity. Please see <a href="https://www.smartkarma.com/compose/insight/50207/Bank%20Credit%20Compass:%20Positive%20Total%20Return%20Sweet%20Spot.%20Read%20more:%20https:/skr.ma/2gzmu" target="_blank" rel="noopener">Bank Credit Compass: Positive Total Return Sweet Spot</a> for more details.US banks kick off the season with reports from JPMorgan Chase, Goldman Sachs and Wells Fargo on Wednesday, 14 April. Although trading revenues may be flat on a full-year basis over 2021, Q1 results could see these rise 10 to 15% year-on-year. Credit costs are anticipated to remain low with loan loss releases continuing although loan growth may still be missing. Net interest margins could remain depressed while interest revenue growth remains challenged.The Fed recently announced that it will remove dividend restrictions and allow US banks to restart share buy-backs from 30 June in those firms which pass the currently ongoing stress tests. As such, we anticipate a lot of talk, but no action, regarding this announcement in earnings teleconferences. Please see <a href="https://www.smartkarma.com/compose/insight/50207/US%20Banks%20and%20the%20SLR%20Situation:%20Overweight%20JPM%20Tier%201%20Securities.%20Read%20more:%20https:/skr.ma/g6CCF" target="_blank" rel="noopener">US Banks and the SLR Situation: Overweight JPM Tier 1 Securities</a> for our views on JPMorgan and its capital situation. Results for this year's test will be released by July 1.In Europe, we saw another market sensitive announcement from <a href="https://www.smartkarma.com/entities/credit-suisse-group-ag" target="_blank" data-smartkarma-citation="entities:22253:1" rel="noopener">Credit Suisse (CSGN VX)</a> last week. The firm outlined the likely impact from losses sustained in liquidating positions related to Archegos Capital Management. We do not see that press release as a reason to buy its Contingent Capital (CoCos). Credit Suisse is skating on thin ice from a capital perspective. Another loss of less than one-half the charges related to Archegos and this could result in the suspension of coupons on CS’ Contingent Capital securities. This leaves little room for maneuver. We continue to believe that Credit Suisse needs to enhance its capital base. Its CoCos may lag the market until the layer of capital is strengthened. Please see <a href="https://www.smartkarma.com/compose/insight/50207/Credit%20Suisse:%20Skating%20on%20a%20Thin%20Layer%20of%20Capital.%20Read%20more:%20https:/skr.ma/rGLd5" target="_blank" rel="noopener">Credit Suisse: Skating on a Thin Layer of Capital</a> and <a href="https://www.smartkarma.com/compose/insight/50207/Credit%20Suisse:%20Where%20There%E2%80%99s%20Smoke,%20There%E2%80%99s%20a%20Capital%20Raise.%20Read%20more:%20https:/skr.ma/yxeJd" target="_blank" rel="noopener">Credit Suisse: Where There’s Smoke, There’s a Capital Raise</a> for more details.Market Outlook: From 1 April, with the start of Japan’s fiscal year, Japanese investors are typically net buyers of risk assets over the following months. This adds to a seasonality affect that usually pushes risk assets higher while safe-haven securities retreat. April may be a positive month from a total return basis, provided US Treasuries do not sell-off materially on inflation concerns.

Executive Summary: Light trading volumes, an issuance holiday and technical asset purchase expectations flattened the US Treasury curve during the week. Bank credit largely underperformed in what appeared to be a carry-trade unwind. All recent higher coupon outperformers experienced large spread declines. We do not expect this to continue as US growth and inflation expectations rise.We think this past week was an aberration, owing to thin markets, a lack of conviction pre-earnings season and concerns on the virus versus vaccine front. There is clear volume-, issuance- and data-risk for the market to contend with next week. We outline these within.Furthermore, we anticipate that market sentiment will revert to concerns regarding possible over-heating in the US economy, which in turn, would lead to a return of Treasury yield curve steepening. The sweet spot of long duration, low investment grade and BB rated bonds would revisit the market. This is a repositioning opportunity. Please see Bank Credit Compass: Positive Total Return Sweet Spot for more details.US banks kick off the season with reports from JPMorgan Chase, Goldman Sachs and Wells Fargo on Wednesday, 14 April. Although trading revenues may be flat on a full-year basis over 2021, Q1 results could see these rise 10 to 15% year-on-year. Credit costs are anticipated to remain low with loan loss releases continuing although loan growth may still be missing. Net interest margins could remain depressed while interest revenue growth remains challenged.The Fed recently announced that it will remove dividend restrictions and allow US banks to restart share buy-backs from 30 June in those firms which pass the currently ongoing stress tests. As such, we anticipate a lot of talk, but no action, regarding this announcement in earnings teleconferences. Please see US Banks and the SLR Situation: Overweight JPM Tier 1 Securities for our views on JPMorgan and its capital situation. Results for this year's test will be released by July 1.In Europe, we saw another market sensitive announcement from Credit Suisse (CSGN VX) last week. The firm outlined the likely impact from losses sustained in liquidating positions related to Archegos Capital Management. We do not see that press release as a reason to buy its Contingent Capital (CoCos). Credit Suisse is skating on thin ice from a capital perspective. Another loss of less than one-half the charges related to Archegos and this could result in the suspension of coupons on CS’ Contingent Capital securities. This leaves little room for maneuver. We continue to believe that Credit Suisse needs to enhance its capital base. Its CoCos may lag the market until the layer of capital is strengthened. Please see Credit Suisse: Skating on a Thin Layer of Capital and Credit Suisse: Where There’s Smoke, There’s a Capital Raise for more details.Market Outlook: From 1 April, with the start of Japan’s fiscal year, Japanese investors are typically net buyers of risk assets over the following months. This adds to a seasonality affect that usually pushes risk assets higher while safe-haven securities retreat. April may be a positive month from a total return basis, provided US Treasuries do not sell-off materially on inflation concerns.

Bank Credit Weekly: Repositioning Opportunity from Carry-Trade Unwind as the Treasury Curve Flattens

Executive Summary: Surprisingly strong US non-farm payroll results on Friday may push yields higher as we start the week. Thereafter, rising Covid-19 cases and vaccine distribution issues may impinge on market sentiment, generating bouts of Treasury buying, a higher US dollar and a risk-off environment in general. These are opportunities to restock and reconsider risk-asset allocations.In a holiday shortened trading week, US Treasury yields had a relatively mild reaction to President Biden’s announced US$2.25 trillion infrastructure investment proposal. The US bond market was not open when March’s initial non-farm payroll (NFP) figures were announced on Friday. The NFP numbers suggest that the US economy is about to run hot. This should stoke reflation concerns as near term growth expectations rise.Covid-19 travel restrictions increased in Ontario, Canada as well as the entirety of France for the month of April. Meanwhile, the Philippines extended Covid-19 related restrictions in Manlla for an additional week through Sunday, 11 April.Amongst Asia EM banks, Philippine bank equity continued their underperformance with the recent lock-down announcements, while China’s banks remained relatively unchanged following year-end result disclosures. Philippine bank shares are lagging their peers in Asia.China’s Banking and Insurance Regulatory Commission (CBIRC) outlined its proposals for additional capital buffers that would apply to domestically significant financial institutions. S&amp;P estimates that the largest banks need to issue as much as 6.5 trillion-yuan ($990 billion) in total loss-absorbing capacity (TLAC) debt capital by 2024 in order to meet Basel TLAC guidelines. We should see a build-up of this debt capital over the next few years with a material portion in non-local currency instruments. In Europe, Monday’s announcement by <a href="https://www.smartkarma.com/entities/credit-suisse-group-ag" target="_blank" data-smartkarma-citation="entities:22253:1" rel="noopener">Credit Suisse (CSGN VX)</a> that losses from exiting Archegos Capital Management could be “highly significant and material” had a materially adverse impact on investor sentiment regarding the firm. We noted in late February that CS’ risk tolerance exceeded that of its peers while its risk management appeared to have challenges. We were fortunate to be ahead of the market with our Underweight recommendation on CS bonds. When we initiated this call, the CS 4.5% coupon 2030 callable Additional Tier 1 bond was trading close to par. It is now below $94. Please see <a href="https://www.smartkarma.com/compose/insight/49970/Credit%20Suisse:%20Where%20There%E2%80%99s%20Smoke,%20There%E2%80%99s%20a%20Capital%20Raise.%20Read%20more:%20https:/skr.ma/yxeJd" target="_blank" rel="noopener">Credit Suisse: Where There’s Smoke, There’s a Capital Raise</a> for more details.In Asia, long duration Subordinated, and Additional Tier 1 (AT1) bank bonds outperformed as Treasury notes sold-off slightly during the week. Concurrently, the belly of the European bank debt curve outperformed as these bonds narrowed by more than weakness in five-year Treasury’s.Market Outlook: From 1 April, with the start of Japan’s fiscal year, Japanese investors are typically net buyers of risk assets over the following months. This adds to a seasonality affect that usually pushes risk assets higher while safe-haven securities retreat. April may be a positive month from a total return basis, provided US Treasuries do not sell-off materially on inflation concerns.

Executive Summary: Surprisingly strong US non-farm payroll results on Friday may push yields higher as we start the week. Thereafter, rising Covid-19 cases and vaccine distribution issues may impinge on market sentiment, generating bouts of Treasury buying, a higher US dollar and a risk-off environment in general. These are opportunities to restock and reconsider risk-asset allocations.In a holiday shortened trading week, US Treasury yields had a relatively mild reaction to President Biden’s announced US$2.25 trillion infrastructure investment proposal. The US bond market was not open when March’s initial non-farm payroll (NFP) figures were announced on Friday. The NFP numbers suggest that the US economy is about to run hot. This should stoke reflation concerns as near term growth expectations rise.Covid-19 travel restrictions increased in Ontario, Canada as well as the entirety of France for the month of April. Meanwhile, the Philippines extended Covid-19 related restrictions in Manlla for an additional week through Sunday, 11 April.Amongst Asia EM banks, Philippine bank equity continued their underperformance with the recent lock-down announcements, while China’s banks remained relatively unchanged following year-end result disclosures. Philippine bank shares are lagging their peers in Asia.China’s Banking and Insurance Regulatory Commission (CBIRC) outlined its proposals for additional capital buffers that would apply to domestically significant financial institutions. S&amp;P estimates that the largest banks need to issue as much as 6.5 trillion-yuan ($990 billion) in total loss-absorbing capacity (TLAC) debt capital by 2024 in order to meet Basel TLAC guidelines. We should see a build-up of this debt capital over the next few years with a material portion in non-local currency instruments. In Europe, Monday’s announcement by Credit Suisse (CSGN VX) that losses from exiting Archegos Capital Management could be “highly significant and material” had a materially adverse impact on investor sentiment regarding the firm. We noted in late February that CS’ risk tolerance exceeded that of its peers while its risk management appeared to have challenges. We were fortunate to be ahead of the market with our Underweight recommendation on CS bonds. When we initiated this call, the CS 4.5% coupon 2030 callable Additional Tier 1 bond was trading close to par. It is now below $94. Please see Credit Suisse: Where There’s Smoke, There’s a Capital Raise for more details.In Asia, long duration Subordinated, and Additional Tier 1 (AT1) bank bonds outperformed as Treasury notes sold-off slightly during the week. Concurrently, the belly of the European bank debt curve outperformed as these bonds narrowed by more than weakness in five-year Treasury’s.Market Outlook: From 1 April, with the start of Japan’s fiscal year, Japanese investors are typically net buyers of risk assets over the following months. This adds to a seasonality affect that usually pushes risk assets higher while safe-haven securities retreat. April may be a positive month from a total return basis, provided US Treasuries do not sell-off materially on inflation concerns.

Bank Credit Weekly: Employment Numbers Confirm a Hot US Economy

It is difficult to make a truly bullish argument on behalf of US Treasuries now. The bottom line is it is still not time to buy duration. Risk yes. Duration no. Emerging Markets? It depends.The Fed re-anchored short-term, front-end, interest rate expectations via the Dot Plot, the Chairman’s comments, and actions to aid the overnight rate market. Overall, it was a better-than-expected communique from the Fed. With a spike of inflation next on the horizon, it may be a hard act to follow.Inflation can hide a host of sins. It can benefit financials and borrowers, but not the vulnerable in society, as inflation is a regressive tax. From a financial market perspective, it is difficult to envision a near-term spike in inflation as being credit positive. Market interest rates may overshoot as insurance against out-of-control inflation expectations. Risk assets, in particular Emerging Market assets, could over-react while the Fed under-reacts.The risk is that US policy makers are “fighting the last war.” Rather than continued curve steepening, we may see a period of consolidation, as short-end interest rate expectations rise at a faster rate,  essentially flattening the yield curve. We expect the Fed to be on watch for this.For financials, we anticipate improved net interest income levels during Q2 as both volume and yields rise. This would also result in higher non-interest income revenues as fee income soars from increased transactions. However, trading activity may see some institutions off-sides in terms of mistiming the market. We believe that it is better to be in banks with solid core operating revenues, rather than firms that have rediscovered and become over-reliant, once again, on trading activity.The recent back-up in US interest rates may be an opportunity to reload in some Emerging Markets (EM), just not in Turkey. Central bank independence is shattered once again by the firing of the Central Bank Governor. Only four months into the role, the former Governor is being replaced by an interest rate dove. We expect a large correction in Turkish bank bond as the markets digest this implausible reality next week. It may be better to focus on opportunities off the radar. EM high yield, but low duration, sovereign and more frontier bonds may be the answer. We cite a few inside.In terms of recent performance, in Asia, short duration and long risk bank bonds kept pace with Treasury weakness to end the week unchanged on a total return basis. Meanwhile, longer-dated European bank Contingent Capital (CoCos) managed to keep pace with Treasury market weakness to end the week unchanged on a total return basis. Each Additional Tier 1 bond callable in 2030 and 2031 tightened by 10 basis points. Given the simultaneous tightening, we ascribe this performance as due a restart of the AstraZeneca shot across the lagging EU’s vaccine effort. A third round of lockdowns may unwind these gains next week. Market Outlook: The US economy may run very hot before we see a change in Fed policy regarding short-term interest rates and the US dollar should remain stronger than analysts forecasted at year-end. Broadly, this is not Emerging Market friendly; however, a strong US economic rebound should benefit EM and European financials. First, we may need to get past the upcoming inflation spike.

It is difficult to make a truly bullish argument on behalf of US Treasuries now. The bottom line is it is still not time to buy duration. Risk yes. Duration no. Emerging Markets? It depends.The Fed re-anchored short-term, front-end, interest rate expectations via the Dot Plot, the Chairman’s comments, and actions to aid the overnight rate market. Overall, it was a better-than-expected communique from the Fed. With a spike of inflation next on the horizon, it may be a hard act to follow.Inflation can hide a host of sins. It can benefit financials and borrowers, but not the vulnerable in society, as inflation is a regressive tax. From a financial market perspective, it is difficult to envision a near-term spike in inflation as being credit positive. Market interest rates may overshoot as insurance against out-of-control inflation expectations. Risk assets, in particular Emerging Market assets, could over-react while the Fed under-reacts.The risk is that US policy makers are “fighting the last war.” Rather than continued curve steepening, we may see a period of consolidation, as short-end interest rate expectations rise at a faster rate,  essentially flattening the yield curve. We expect the Fed to be on watch for this.For financials, we anticipate improved net interest income levels during Q2 as both volume and yields rise. This would also result in higher non-interest income revenues as fee income soars from increased transactions. However, trading activity may see some institutions off-sides in terms of mistiming the market. We believe that it is better to be in banks with solid core operating revenues, rather than firms that have rediscovered and become over-reliant, once again, on trading activity.The recent back-up in US interest rates may be an opportunity to reload in some Emerging Markets (EM), just not in Turkey. Central bank independence is shattered once again by the firing of the Central Bank Governor. Only four months into the role, the former Governor is being replaced by an interest rate dove. We expect a large correction in Turkish bank bond as the markets digest this implausible reality next week. It may be better to focus on opportunities off the radar. EM high yield, but low duration, sovereign and more frontier bonds may be the answer. We cite a few inside.In terms of recent performance, in Asia, short duration and long risk bank bonds kept pace with Treasury weakness to end the week unchanged on a total return basis. Meanwhile, longer-dated European bank Contingent Capital (CoCos) managed to keep pace with Treasury market weakness to end the week unchanged on a total return basis. Each Additional Tier 1 bond callable in 2030 and 2031 tightened by 10 basis points. Given the simultaneous tightening, we ascribe this performance as due a restart of the AstraZeneca shot across the lagging EU’s vaccine effort. A third round of lockdowns may unwind these gains next week. Market Outlook: The US economy may run very hot before we see a change in Fed policy regarding short-term interest rates and the US dollar should remain stronger than analysts forecasted at year-end. Broadly, this is not Emerging Market friendly; however, a strong US economic rebound should benefit EM and European financials. First, we may need to get past the upcoming inflation spike.

Bank Credit Weekly: Inflation, the Next Market Challenge or Opportunity?

India

Bank of Baroda owns and operates commercial banks in India.  The Group's banks provide the traditional forms of banking services, including CD's, Credit Card services and a variety of car loans, in addition to gold banking and a range of insurance services.  The Group also owns IBU International Finance Limited, an international banking company in Hong Kong.

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Bank Of Baroda (BOB IN)

Bank Credit Weekly: Narrative Change Pushes Carry-Trade Unwind as Treasuries Rally

The narrative has changed. There is little to stand in the way of further Treasury market strength near term. This should lead to US$ weakness and...

Hank Calenti, CFA

Edelweiss: A Beneficiary of Potentially Increased Adoption of Co-Lending by PSBs

In the upcoming reform agenda for PSBs, there is likely to be a push towards co-lending. Edelweiss, who has already partnered with PSBs and is...

Ankit Agrawal, CFA

Bank Credit Weekly: Repositioning Opportunity from Carry-Trade Unwind as the Treasury Curve Flattens

A confluence of thin volumes, trading holidays and technicals flattened the US rate curve. Bank credit underperformed in a carry-trade unwind. This...

Hank Calenti, CFA

Bank Credit Weekly: Employment Numbers Confirm a Hot US Economy

Strong US employment figures may push yields higher as we start the week. Thereafter, rising virus versus vaccine issues may impact market...

Hank Calenti, CFA

Bank Credit Weekly: Inflation, the Next Market Challenge or Opportunity?

The recent back-up in US rates may be an opportunity to reload in some Emerging Markets. A US inflation spike is the next hurdle. EM High Yield,...

Hank Calenti, CFA

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