There’s Something About the Term Premium

Historically, investors have required extra yield to hold longer-term bonds instead of short-term securities to compensate them for the added uncertainty. Thus, in a “normal” world, term premium (TP) should not be persistently negative. Yet, since 2016, TP has been...

Intermarket Gauges suggest recession or risk-on

The S&P has been very resilient this year in the face of slowing growth, falling earnings and trade war uncertainty. However, underneath the surface, market rotations have been very bearish. Over the past year, high-yield credit has underperformed investment grade...

Chilean Peso-Copper Correlation Returns

Having suffered at the hands of the protracted drawdown in global copper prices over the course of 2011-2015, Chilean copper production has recovered in line with the rally in prices since the beginning of 2017. This in turn has allowed the Chilean peso-copper...