Andrew Hollins, Director of Corporate Treasury Proposition at Refinitiv, brings you a round-up of the latest Corporate Treasury Data Insights, including analysis of the outlook for U.S Treasuries, a green bank to aid investment in clean technologies and the impact of inflation on the U.S. midterm elections.
- Does activity on the U.S. Treasuries market provide investors with clues about the direction of interest rates and the U.S. dollar?
- Part of the U.S Inflation Reduction Act signed by President Biden includes funds for a National Climate Bank. Meanwhile, what impact will inflation have on the U.S. midterm elections?
- The turbulence in the markets caused by the UK government’s ‘mini-budget’ has caused some lenders to withdraw mortgage products. Will the higher rates persist?
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Chart of the Month
With bond prices falling dramatically as central bank tightening accelerates, buying bonds may appear confusing – but perhaps that very confusion is good enough reason in itself.
In the face of continued cross-market volatility, U.S. dollar strength and rising interest rates, corporate treasurers are not alone in asking ‘where next?’.
Recent data points, including September’s Chicago PMI and August’s Job Openings, indicate that the economy slowing.
Indeed, the market responded by softening U.S. bond yields, a slightly weaker USD and the VIX coming off its recent highs. Yet with multiple geo-political and macro factors still causing concern, Mike Dolan, Reuters Editor at Large, asks if bond market activity holds a clue to the outlook for rates and the USD.
U.S. set to create US$27bn Green Bank
The U.S. Inflation Reduction Act signed into law by U.S. president Joe Biden includes US$27bn for a National Climate Bank that is expected to leverage billions more in clean technology investments over the next decade from banks and private equity investors. What will the Green Bank fund?
USD LIBOR: The five trillion-dollar legacy problem
With USD LIBOR due to cease or become permanently unrepresentative after June 2023, Jacob Rank-Broadley explains how the introduction of the LIBOR Act in the U.S. and Refinitiv’s USD IBOR Cash Fallbacks can help smooth the transition. How can you respond to the challenge?
Will inflation determine the U.S. midterm elections?
With inflation running at multi-decade highs, a new report by Fathom Consulting assesses the cause of the problem and asks, “what impact will this have on the upcoming U.S. midterm elections?”. See more charts
UK mortgage withdrawals in response to the UK ‘mini-budget’
UK mortgage lenders began withdrawing their products from the market last week, as the effects of Chancellor Kwasi Kwarteng’s ‘mini-budget’ on Friday 23 September were felt across the economy. Are higher rates here to stay?
Capital favouring liquidity during these turbulent times
Volatility and uncertainty seem to be re-emerging back into the markets. Key policymakers have gone on the record with comments essentially dismissing the idea of a “soft landing.” Where are investors parking their money?
Refinitiv Corporate Treasury Newsbeat
- Refinitiv launches forward-looking term rate versions of ARRC recommended fallback rates to facilitate industry transition from USD LIBOR | Refinitiv commences publication of forward-looking term rate versions of its ARRC recommended fallback rates – USD IBOR Cash Fallbacks. This follows the Alternative Reference Rates Committee’s (ARRC) March 2021 announcement that it had selected Refinitiv to publish its recommended fallback rates for cash products, and Refinitiv’s July 2022 announcement of its intention to launch the new USD IBOR Cash Fallbacks settings in September 2022. Read more here
- HDFC Bank signs long-term data and technology agreement with Refinitiv | Refinitiv has announced a long-term strategic agreement with HDFC Bank, India’s largest private sector bank, to support digital transformation and innovation programmes across the whole business in India. Read more here
- WM/Refinitiv Spot Rates – request for client feedback – updated statement | Refinitiv has published a statement providing a summary and insight into the responses received from the WM/Refinitiv Spot Rates (WMR) “Request for Feedback”. Refinitiv, through its wholly owned subsidiary Refinitiv Benchmark Services (UK) Limited (RBSL), is the WMR benchmark administrator and holds the primary responsibility for all aspects of the provision of the WMR. RBSL is authorised and regulated in the UK by the Financial Conduct Authority (FCA). Read more here