Bond Markets: Between Vigilance and Neglect?

Eurizon SLJ Capital

Welcome to the Long & Short, an audio blog production by Eurizon SLJ Capital that takes a look at the macroeconomic themes of the past week and has been recorded for professional investors. This is an audio version of a LinkedIn newsletter written by Neil Staines, published on the 10th of January 2025.
In the first edition of 2025 of "The Long & Short," Neil Staines explores the impact of bond vigilantes on global markets and monetary policy:

• The Bank of Japan is gradually moving toward policy normalisation. The debate centres on whether the next 25bp rate hike will occur in January or March.
• UK fiscal policy, perceived as a consumer-level tightening, has exacerbated market concerns, driving up yields and highlighting potential dovish shifts in monetary policy.
• We continue to see gradual disinflation and growth moderation, though unsustainable U.S. debt and fiscal policies could heighten market risks.
• Market assumptions about the inflationary and contractionary effects of Trump’s fiscal and immigration policies may be overly simplistic, risking mispriced expectations.
• The continuation of disinflation and growth moderation aligns with Fed projections, though higher U.S. yields pose challenges for the dynamics of government and corporate debt.

Chapters:
00:00 Introduction to the Long and Short
00:25 Japanese Interest Rate Expectations
01:55 In Reeves we Trusst?
04:13 Top Trumps?
05:46 Cuts both ways?
07:28 The Long & Short of it…
08:46 Disclaimer and Legal Information

The opinions expressed in this podcast are those of the presenters and do not necessarily reflect the views of Eurizon SLJ Capital, Eurizon Capital, or the Intesa Sanpaolo Group. The information and opinions shared are intended solely for professional investors and should not be relied upon by other investors. Please note that the information provided in this recording is for informational purposes only and is not intended to be complete or constitute an offer to buy or sell securities or any derivatives. It has not been prepared in accordance with legal and regulatory requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute research on investment matters and should not be construed as containing any recommendation, advice or suggestion, implicit or explicit, for any investment strategy or financial instruments, the issuers of any financial instruments, or a solicitation, offer or financial promotion relating to any securities or investments. ESLJ and its affiliates do not assume any liability whatsoever for the contents of this podcast and do not make any representation or warranty as to the accuracy or completeness of any information contained in this communication.