It’s official: US Treasury to launch a 2-month T-bill
Invesco Fixed Income does not anticipate significant market disruption due to the new T-bill offering
Time to read: 2 min
A new 2-month Treasury bill (T-bill) will launch in October, according to details announced by the Treasury on Aug. 1. The new T-bill will share a schedule with the 1-month T-bill, which is currently auctioned on Tuesday and settled on Thursday of the same week. Then on Dec. 6, both bills will transition to a Thursday auction and settlement the following Tuesday. Invesco Fixed Income believes that this transition period should allow investors to become familiar with the new bill and help minimize the possibility of disruption at the short end of the Treasury bill yield curve.
ContinueSelecting an alternative strategy
How to incorporate alternatives into a portfolio
Time to read : 4 min
I’ve written this summer about the potential benefits of alternative investments. Let’s assume that readers of my previous blogs agree that my ideas have some merit and it is time to diversify into alternatives (alts). The devil is always in the details. Of all the different alt funds available, which is best for a given investor? And where does it fit in a portfolio? In this blog, the fourth in my series explaining the basics of alts, I will suggest a process that may help investors select the best alternative strategy for their objectives.
ContinueWhat currency pressures in Turkey and other countries may mean for investors
Weekly Market Compass: The UK, China and Iran have also experienced currency pressure
Time to read: 4 min
Activity in currency markets has more than tripled in the last two decades. Between 2001 and 2016, global turnover in currency markets rose from $1.2 trillion to $5.1 trillion,1 and the geopolitical disruption of the last two years has increased currency activity even further. Last week brought several significant examples of this trend in the UK, China, Iran and — most dramatically — Turkey. Is this a sign of more disruption to come?
ContinueWhat could a trade war mean for US macro fundamentals?
The biggest risk could be a tightening of financial conditions
Time to read: 3 min
The growing prospect of a global trade war presents major consequences for global markets, and the implications are difficult to assess. Because the past 30 years have consisted of generally expanding trade liberalization and global trade (shown in Figure 1), we are left with limited information on how financial markets would likely respond. Below, I discuss Invesco Fixed Income’s view of how the situation could affect US macro fundamentals, and I highlight the potential impact on fixed income markets.
ContinueMLPs: A light at the end of the pipeline
Master limited partnerships may be poised for a turnaround
Time to read: 4 min
The master limited partnership (MLP) asset class has experienced considerable volatility since 2014, with many individual securities trading well off previous highs. However, the Invesco Real Estate team believes there has been a dislocation in MLP pricing, resulting in value and opportunity in the space.
ContinueCurrency outlook: We expect US dollar appreciation due to trade tensions
Invesco Fixed Income shares its views on currencies around the world
Time to read: 3 min
US dollar
Neutral. Trade tensions have resulted in a partial change to our view. We have revised our expectation for a broad US dollar weakening trend, now believing it may appreciate versus currencies linked to China as trade tensions increase. At this point, it appears likely any increase in tariffs may adversely affect valuations of Asian currencies (excluding Japan) such as the Chinese renminbi and Korean won.
ContinueInterest rate outlook: Strong US GDP growth, trade worries may keep rates range-bound in 2018
Invesco Fixed Income shares its views on rates around the world
Time to read: 3 min
US: Neutral. We expect US rates to stay range-bound due to growing trade worries and above-trend growth. Assuming no large trade-driven shocks, US growth is likely to remain supported by stronger energy sector capital expenditures, strong job growth and consumption. We expect 2018 gross domestic product (GDP) growth of around 2.8%, one percent above our estimate of the long-term sustainable trend. Core inflation continues to be benign, and we expect it to peak in the next two months at around 2.3%.
ContinueHow factors may help bond investors reach their goals
The quality and value factors may help investors target specific risk and return objectives
Time to read: 3 min
In recent years, factor-based investments have become increasingly popular for equity investors. Often missing from the discussion, however, is the concept of fixed income factor strategies. At Invesco Fixed Income, our view is that bond investors can potentially benefit from a factor-based approach. We’ve launched a new suite of exchange-traded funds focused on two factors — quality and value — that we believe may help investors reach their objectives.
ContinueFour key issues to watch in August
Weekly Market Compass: Several critical issues are heating up this summer, including trade and Brexit
Time to read: 4 min
August is upon us and lingering issues are heating up, with the potential to impact markets during the second half. Below, I recap three important events from last week and highlight four key issues to watch in August.
ContinueValuations remain a hurdle in Japan
However, we’ve uncovered two recent opportunities that meet our criteria
Time to read: 2 min
Japan has been a market where investors have been buying growth at all costs, and the opportunity set remains limited from a valuation perspective, in our view. However, the Invesco International and Global Growth team has been able to identify select opportunities so far this year. Invesco International Growth Fund remains underweight Japan, but we added to our exposure in the second quarter in companies that meet our Earnings, Quality and Valuation (EQV) criteria.
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