Where is the value in bank debt’s structure ?

Further h opes of de-escalating trade war between US and China, as well as the US-UK tariff deal on Autos and metals last week pushed credit spreads tighter again. AT1s were one again the outperformers (-18bp), followed by €HY (12-bp) which outperformed their $ counterparts by 3bp despite suffering from net outflows (-€45mn from EPFR) while US HY funds benefited from another week of net inflows ($1.6bn from Lipper). There is still some catch-up to do for €HY vs the iTraxx X-Over (30bp lag) and US$ HY (13bp lag) Bank Subs have more difficulty to perform (4.5bp “only”) given their rel...

Financial markets on tenterhooks ahead of trade talks

How is China reacting to Trump’s trade war?

The escalating trade tensions between the US and China has led to a significant strain on the trade relationship between the two countries, both of which rely heavily on each other. Despite some exemptions to mitigate the costs, and the ongoing negotiations for a potential deal which are taking place in Geneva, the tariffs are signs of the deteriorating relationship.This paper assesses the impact of US tariffs on China’s employment and GDP. We consider two scenarios: one where only China's exports to the US drop by 80%, leading to a potential decline in manufacturing employment by 6.4%, riskin...