观点

REIT credit spreads remain relatively contained despite elevated Treasury yields, suggesting investors view balance sheet risk as manageable and refinancing concerns as more limited.

US High Yield spreads tightened by 3bps to 260bps respectively.

Asia USD High Yield spreads tightened by 12bps to 316bps.

US high-yield bond yield spreads to US Treasuries have narrowed to their tightest levels in well over a month, with the Bloomberg measure we track of the spread at 263 basis points

Market Watch : Asian markets are likely to open today on a slightly cautious tone, awaiting China's non-manufacturing and composite PMIs.

In our view, however, the fiscal plans should provide some reassurance to financial markets.

Markets were relieved that he sounded more hawkish and reiterated the Fed’s 2% PCE goal for price stability.

We estimate that current face-value weighted coupons for bonds maturing in 2027 and 2028 could double from current levels, if these issuers refinanced their maturing bonds at today’s index yields

IG issuers with bonds maturing in 2027 and 2028 tend to face larger average marginal coupon increases than their BB rated peers.

The clear takeaway is that the index-level difference is negligible.

US personal spending rose 0.2% MoM, but adjusted for inflation it remained flat. Spending has been concentrated in essential and asset-price-linked services rather than discretionary demand.

Consumer spending declined following the Iran war, while wage bill growth remained resilient but slowed.

Meanwhile, the market expects retail sales growth to accelerate to 3.1% YoY, from a revised 0.6% in June.

We continue to anticipate a move in the 10yr yield into the 4.75% to 5% area as the real-rate elevation pressure remains.

On a daily basis, oil is the key driver of rates, but overall the pricing of inflation risks remains very well-behaved.

If we do get upside inflation surprises from the eurozone, euro rates can easily push higher still, especially at the short end of the curve.

Because China's services sector is primarily domestically focused, this suggests domestic demand remained relatively sluggish in August.

Final domestic demand overall (spending by Canadian businesses, consumers, and governments) rose 3.9% annualized after edging lower (-0.1%) in Q2.

For now, the PMI data suggests that we are due for another month of relatively sluggish domestic activity data in August, with any potential rebound likely to be limited.

The services sector, which is the most exposed to domestic demand and, consequently, to the energy shock affecting incomes, is showing signs of better-than-expected resilience in the central months of the year and does not appear to be affected by the renewed climate of geopolitical uncertainty.

It is not the Board’s job to run the company, that’s management’s responsibility. The Board’s role is to protect the interests of the company, take a long-term view and provide effective oversight.

This includes supporting management, asking the right questions and constructively challenging decisions where appropriate.

CommBank estimates around $22 billion of transport and enabling infrastructure has been or is being delivered to support the airport.

Though Italy has been one of the largest recipients of funds from the EU’s Recovery and Resilience Facility (RRF), which have provided it with access to €194.4 billion in grants and loans,1 the program’s conclusion this year further emphasises the need for access to private capital to meet future investment requirements.

These developments have once again reduced the prospects of bringing the conflict to an end. However, with an estimated 6–8 million barrels per day of crude flowing through the Strait, the upside risk is for now being capped.

A potential resolution of the Gulf conflict could ease current downside pressures on the economic outlook and provide some support to growth prospects, while any further escalation would add to downside risks.

US healthcare and life sciences companies such as Bristol Meyers Squibb and Abbott are also looking to India for clinical trials and research partnerships, reflecting the country’s growing importance within global healthcare value chains.

Indian pharma companies have continued to pursue capability-building initiatives in the US to strengthen market access, while cross-border collaborations are helping companies access new technologies and patient populations.

Approximately 90% of REIT debt is fixed rate and the average debt maturity is about six years. As a result, much of the sector was able to lock in financing costs before rates moved sharply higher, helping shield cash flows from rising borrowing costs.

Warsh also asserted that “money matters,” a pointed reminder of his position that the Fed's balance sheet should be reduced, curtailing the Fed's position as a holder of government debt.

Competition is also increasing. Marvell’s Google win shows that customers may deliberately use several suppliers. That expands the overall opportunity, but makes market share less predictable.

Security vendors may face tougher competition as larger platforms bundle more tools.

Hormuz disruption remains the dominant driver. Despite the headlines around Venezuelan reserves, oil prices continue to respond primarily to developments in the Gulf, given the risks to supply and shipping through the Strait of Hormuz. Roughly one-fifth of global oil trade passed through the strait prior to the conflict, making any threat to those flows immediately relevant for prices.

Despite the headlines around Venezuelan reserves, oil prices continue to respond primarily to developments in the Gulf, given the risks to supply and shipping through the Strait of Hormuz.

Venezuelan production gains will take years. Even under optimistic assumptions, Venezuela faces substantial operational challenges. The country currently produces roughly 1.12 million barrels per day despite holding the world’s largest proven reserves, reflecting years of underinvestment, sanctions, infrastructure deterioration, and power shortages. Oil output has risen by only around 100,000-200,000 barrels per day since the start of the year, underscoring the difficulty of rebuilding capacity from a low base.

Venezuelan production gains will take years. Even under optimistic assumptions, Venezuela faces substantial operational challenges. The country currently produces roughly 1.12 million barrels per day despite holding the world’s largest proven reserves

So, while the US-Venezuela announcement reinforces the longer-term potential of the country’s energy sector, we anticipate little immediate impact on crude oil or US gasoline prices.

we anticipate little immediate impact on crude oil or US gasoline prices. The key price drivers remain the US-Iran conflict, shipping levels through the Strait of Hormuz, and the broader trajectory of global energy demand.

In both cases, markets have reacted by pushing the currency down and term premium up, acting as a guardrail for now.

Salesforce, which sells software that helps companies manage customers and sales, raised its annual outlook and showed better demand for its AI products. Its shares closed at 252.05 USD, up 22.6%. CrowdStrike, a cybersecurity company, reported record net new annual recurring revenue (ARR), a measure of new subscription business. Its shares closed at 227.96 USD, up 20.5%.

The manufacturing PMI hit 52.8 in August (+0.9 pt), its highest since May 2022, driven by employment and new orders, with solid gains in both France and Germany.

Official PMIs stayed below 50 in both manufacturing (49.8 in August vs. 49.2 in July) and services (49.0 in July and August).

Following a breakdown in US-Canada trade talks, tariffs of up to 50% are set to be implemented by Canada on 8 September on USD 20bn of US imports, in response to a similar measure announced by Washington.

the administration is reportedly considering an additional 7.5% tariff on goods from China due to “excess manufacturing capacity”

She notes that incomes have been rising broadly across the population and argues that the economy looks more resilient than the headlines suggest.

We expect a modest recovery of perhaps 65k in August, but the low-hire, low-fire narrative persists.

The 2Y inflation swap stands at 2.5%, which is above target but far from alarming.

Meanwhile, the 5Y5Y forward inflation swap is just 2.15%, reflecting a high degree of confidence in the ECB’s monetary policy.

China's manufacturing PMI rose to 49.8, up from 49.2 in July. This was stronger than expectations (market: 49.5, ING: 49.5) and moved closer to the neutral level. Still, it remains in contractionary territory for a second straight month.

Encouragingly, the most important subindices recovered. Production (50.4), new orders (50.6), and new export orders (50.1) all returned to expansionary territory.