In August 2011, as a debt ceiling crisis prompted a U.S. Spot gold, seen as a hedge against inflation and banking turmoil, is trading at around $2,040 per ounce, up around 12% so far this year and near record highs. 5/ ALL THAT GLITTERSĭeutsche Bank strategist Robin Winkler says a good hedge may be buying gold against the dollar, as it has the tightest relationship with newsflow around the debt ceiling. Zverev's fund owns stocks including Hubbell Incorporated (HUBB.N), an electricity company, and tech defense contractor Leonardo DRS. "In equities, anything exposed to government spending will have a bit of a wobble" as the X-date approaches, Zverev said. Republican proposals for spending cuts may effect green investment initiatives signed into law last year. President Joe Biden's Inflation Reduction Act, a stimulus scheme now caught in the crosshairs of debt ceiling battles. Mikhail Zverev, manager of Edinburgh-based Amati Global Investors' strategic innovation fund, said that around 15% of his fund's holdings were companies broadly exposed to spending related to U.S. "If debt ceiling concerns grow we think markets will price in more Fed rate cut expectations, which means 5-year yields would fall," said Miyairi. Nomura currency strategist Yusuke Miyairi said another reason to expect yen outperformance if wrangling in Washington escalates is a strong correlation between dollar/yen and five-year Treasury yields. The safe-haven yen could be one beneficiary. 3/ BUY THE YENĭebt ceiling jitters are good timing for the yen, which slumped 1.6% last week as the Bank of Japan held fast to ultra-loose monetary policy. CDS protection buyers," said Voon Kiat Lai, senior portfolio manager at Redhedge Asset Management.Ĭlosing in on the X-date, the risk premium on CDS might rise, making this protection more valuable and, therefore, more profitable if sold on to others, he said. "Although a default is highly unlikely, the large potential pay out in the event of a CDS trigger on a technical default continues to attract U.S. Traders most commonly use 6-month CDS, which on Thursday were trading around 241 basis points (bps), double where they stood 14 days ago, according to one market participant. "So we've been arbitraging." 2/ RAINY DAY DEFAULT PROTECTIONĬredit default swaps (CDS), which work like insurance against a debt default, are seeing strong demand. For example, in April, yields on one-month T-bills were as low as 3.34% while six month bill yields approached 5.1%. Marciot said he had been taking advantage of a difference in yields between T-Bills of varying maturities as debt ceiling jitters had created an unmerited gap between bills that fall due before and after the expected X-date. Unigestion's head of investments, Olivier Marciot, said he was taking advantage of higher yields on longer maturity T-Bills likely to fall due after the "X-date" - when the government would exhaust its cash and borrowing capacity. īlackRock says (BLK.N) it's been buying Treasuries in anticipation of an economic slowdown and a protracted debt ceiling fight. Yields on some short-dated Treasury bills have shot up - two-month T-Bills have surged to over 5%, rising for six straight weeks. debt limit raises the risk of fresh turmoil for markets. If re-delivery is unavailable we are not responsible to refund or send a replacement item.Stalemate in Washington over raising the U.S. If the delivery address given when purchased is wrong then you will be responsible for the cost of re-delivery ( If available) These instructions will have a time limit. If the delivery attempt is unsuccessful, a card will be left at the delivery address to arrange collection from the delivery service provider. We cannot be held responsible for how long it takes for your order to pass through customs. When importing items outside the UK this will always incur a customs inspection. We are not responsible for any import or custom fees associated with your order, please check with your country’s regulations to see if there will be any additional costs. This includes any import fees for orders sent with Free Express shipping. International Delivery is free on orders over £100 and over Rest of the World - 5-14 working days / £12.99 (There maybe slight delays due to COVID19)Īll orders will be dispatched within 5-14working days via tracked delivery. Please note our working days are Monday to Friday Our aim is to deliver your item(s) as quickly and efficiently as we can.Īll orders will be dispatched within 3-10 working days via Royal Mail.
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