DoubleLine International Fixed Income webcast for the month of April 2019, hosted by portfolio managers Su Fei Koo and Valerie Ho.
TAB I – Macro Outlook
International Fixed Income
Global Macro Drivers
- Global growth uncertainty
- More accommodative Central Banks
- China growth deceleration
- Brexit
Q1 hedge fund letters, conference, scoops etc
International Fixed Income
Falling Global Growth Expectations
Source: International Monetary Fund (IMF), DoubleLine
International Fixed Income
Federal Reserve’s Summary of Economic Projections
Source: Bloomberg, DoubleLine
GDP - Gross Domestic Product, PCE - Personal Consumption Expenditure
International Fixed Income
Changing Fed Communication
Source: Bloomberg, DoubleLine
International Fixed Income
Hikes Implied by Fed Fund Futures
Source: Bloomberg, DoubleLine
International Fixed Income
More Accommodative Central Banks
Developed Market Central Banks Have Turned More Accommodative
ECB - Extended forward guidance stating that interest rates are expected to remain at their present levels at least through the end of 2019, slashed its growth forecast for 2019 to 1.1% from a prior 1.7% estimate, and offered a 2 year liquidity injection for banks through a TLTRO-III.
BoJ - Committed to Yield Curve Control and is unlikely to change its policy course until after the planned October consumption tax hike
BoE - On hold and watching for Brexit risks
BoC - Softened its hiking bias, highlighting a sharper than anticipated slowdown in the 4th quarter. The outlook continues to warrant a policy rate that is below the neutral range, dropping previous guidance that the interest rate would need to rise over time.
RBNZ - Took a dovish turn and stated the more likely direction of the next OCR move is down vs the previous February statement where the bank introduced symmetric forward guidance.
RBA - Turned more dovish, seeing downside risks to the global economy amid trade uncertainty and balancing a weak housing market with a strong labor market.
International Fixed Income
Falling G10 Rates
Source: Bloomberg, DoubleLine
International Fixed Income
China Economic Activity Slowing
Source: DoubleLine, Bloomberg
China Li Keqiang Index consists of the change in bank lending, rail freight and electricity consumption; China GDP annual percentage change; Eurozone Real GDP year-over-year: Gross domestic product (GDP) measures the final market value of all goods and services produced within a country. It is the most frequently used indicator of economic activity. The GDP by expenditure approach measures total final expenditures (at purchasers' prices), including exports less imports.
See the full slides below.
