Who is left in the AAA club? (the US is now split-rated AA+)
Source: Jim Bianco, Bloomberg
The US bond Market has now been in a drawdown for 3 years, by far the longest in history
Source: Charlie Bilello
Banco Central do Brazil Surprises with a Larger-than-Expected Rate Cut!
Following the surprising rate cut by 100bps from Chile's Central Bank earlier this week, Banco Central do Brasil (BCB) has also made an unexpected move by announcing a rate cut of 50bps, surpassing market expectations of 25bps. The BCB President, Roberto Campos Neto, reduced the Selic to 13.25% yesterday, with a split decision among board members, four of whom voted for a smaller quarter-point cut. In a related statement, policymakers emphasized the improved consumer price outlook and the decline in longer-term inflation expectations. With Brazil's recent rating upgrade and positive progress in inflation, the country appears well-positioned to continue its path of prudent monetary policy decisions. Could we expect similar rate cuts from Peru and Mexico in the region? In any case, just as at the beginning of the tightening cycle, Latin American central banks are once again ahead of their developed counterparts. Source : Bloomberg.
U.S. High Yield credit spreads : time for decompression?
The updated Fed's July senior loan officer survey reveals a notable trend—there's an even higher net share of banks tightening lending standards for C&I compared to the prior survey in April. Historically, this has had implications for US high yield credit spreads. But is this time different? Source : Bloomberg
US Credit rating by agency
Moody's: Aaa S&P: AA+ Fitch: AA+ Source: Evan
BREAKING: Fitch downgrades the United States' long-term credit rating from AAA to AA+
Fitch says that "repeated debt-limit political standoffs and last-minute resolutions" are to blame. They note that debt-ceiling standoffs have "eroded" confidence in fiscal management. Source: The Kobeissi Letter, Bloomberg
Bonds are looking the most attractive vs stocks in decades, according to one metric
The gap between the earnings yield of the S&P 500 and the yield on the 10-year Treasuries dropped to around 1.1 percentage point last week, its narrowest since 2002. Source: Lisa Abramowicz
🌎 Global yield curve steepening gained momentum last week as a sign that major central banks are nearing the end of their tightening cycles
Source: Bloomberg, Fast reveal
