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Alpinum Investment Management’s Blog offers an opportunity to share some of the knowledge we gathered over the years blended with current markets trends and activities.

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Concrete stairs credit investment

Real rates increased while expected inflation did not (yet) move

Alternative Credit Letter, Blog /

Since December 2020 US long term nominal yields (US Treasury 10y) rose 60 bps, while expected inflation (US Inflation Swap 5y5y) remained flat at ~2.2% Markets incorporate a benign outlook, but inflation will pick up significantly over the next quarters based on statistical effects (y-o-y comparison) and cyclical forces (economic recovery, lower unemployment, higher commodity prices) Therefore,

Real rates increased while expected inflation did not (yet) move Read More »

US consumer spending

US consumer spending

Blog, Newsflash /

US consumer spending is the engine of economic growth and is close to 70% of GDP. According to a recent survey by the Harris Poll, 71% of Americans say they miss socializing in restaurants and bars and 61% say they miss shopping in stores. Growing percentages of people say they’re planning on splurging on vacations,

US consumer spending Read More »

US bond market

US bond market

Blog, Newsflash /

The US bond market has seen the 2yr/10yr US treasury yield curve steepening. The steepening is justified by the cyclical rebound, pent-up demand and higher inflation. Should inflation surprise on the upside and long-term yields continue to rise, the US Fed will have to decide on how to control the yield curve if they don’t

US bond market Read More »

Government Bonds Slide

Government Bonds slide

Blog, Newsflash /

Year-to-date long-term government bonds have slid across the world, reflecting investors’ expectations of an economic recovery. The US Treasury 7-10yr total return index is down -1.7% ytd (current yield 1.18%), while the German Sovereign 7-10yr total return index is down -0.7% ytd (current yield -0.43%). Should interest rates continue to creep up, investors in long-duration

Government Bonds slide Read More »

Concrete stairs credit investment

What inflation level will be accepted by the FED?

Alternative Credit Letter, Blog /

Since September 2020, the FED’s policy allows for a period of inflation over their 2% target: “[…]the Committee will aim to achieve inflation moderately above 2 percent for some time[…]”, which is indicating that they are more concerned about the prospect of too little inflation, rather than too much. So, what temporary inflation level will

What inflation level will be accepted by the FED? Read More »

10 year US Treasury/Copper gold

Inflation

Blog, Newsflash /

Inflation remains a distant threat as both the output and unemployment gap will remain meaningful in 2021. That said, year-over-year inflation rates will temporarily jump as numbers were extremely depressed at the nadir of the recession. The ratio between copper and gold prices is a gauge of economic confidence and has been pointing upwards. The

Inflation Read More »

plenty of economic stimulus

Economic Stimulus

Blog, Newsflash /

No central bank and no government wants to remove economic support too quickly and there is plenty of economic stimulus for companies profit margin to recover over the coming months. This is thanks to the positive effects of operational leverage on earnings. Example: a company has USD 100 in revenues and USD 10 in profits.

Economic Stimulus Read More »

Concrete stairs credit investment

US short-term rates don’t move, but curve set to steepen

Alternative Credit Letter, Blog /

With the arrival of the pandemic crisis, the FED had cut rates aggressively close to zero. In addition, it had announced an adaption of its interest rate policy towards an “average inflation targeting” and that it will keep short term rates low for a multi-year period. Since late 2020, the long end of the USD OIS swap curve

US short-term rates don’t move, but curve set to steepen Read More »

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