Luke Hickmore, investment director at Abrdn, discusses the main issues trading desks should be focusing on this week, including his house views on the so-called “mountain top” profile for interest rates. He also unpacks the growing concerns amid strike actions seen in the US and UK; the risks behind the reshoring of manufacturing taking place globally and some of the overlooked opportunities in emerging markets.
North America
- Equities volumes are low for the year to date, and bid-ask spreads widened week on week. US investment-grade debt volumes are stabilizing but liquidity appears good.
- Data: Retail House prices on September 25, US GDP Growth on September 28, and Personal Consumption Expenditure numbers on Sept 29.
- Primary equities: 4 IPOs expected, low for the five-year average. The biggest IPO should be Webuy Global.
- US axe data, which is within normal ranges, indicates a higher proportion of bids versus asks in credit.
Europe
- Equities and Euro investment-grade volumes are very high and liquidity looks good across the board.
- Data: European Economic Sentiment on September 28, UK GDP Growth, and EU Inflation rate data on September 29.
- Primary equities: No IPOs expected this week (Data as of Friday afternoon, Sept 22).
- EU axe data, within normal ranges, suggests much higher net buying versus selling of credit.
- GBP axe data, which is within normal ranges, has seen a negligible change in buying versus selling.
