Spotlight on China and Australia, surging government debt and geopolitical risks

Published on 6 November 2023

Brian Mangwiro, portfolio manager at Barings, discusses important signals out of China and Australia this week and the knock-on effects on global fixed income. He also talks through how he’s positioned in terms of US Vs European bonds going into year-end; the implications of the growing volume of government debt, and intensifying geopolitical risks.

North America

  • Equities volumes saw little difference week on week, and liquidity worsened. Massive uptick in US IG volumes and had the best liquidity seen all year.
  • Data: US Mortgages data on November 8 and Initial Jobless Claims on November 9.
  • Primary markets: 7 IPOs expected. The largest expected deal is Hamilton Insurance at $255 million.
  • US axe data, which is within normal ranges, indicates a higher proportion of bids versus asks in credit.

Europe and the UK

  • Equities volumes are up week on week, and liquidity improved. Euro investment grade volumes surged upward and had the best liquidity seen all year.
  • Data: EU Retail Sales on November 8 and UK GDP Growth on November 10.
  • Primary equities: No IPOs expected.
  • EU axe data, which is within normal ranges, suggests a higher proportion of EU dealer bids Vs asks in credit.
  • GBP axe data, within normal ranges, suggests much higher net buying Vs selling of credit.