Kuwait is set to return to the international bond market for the first time in eight years, after picking banks to arrange a sale of dollar debt https://t.co/7iRXklSSN4 ...

Political & Economic Context - The UK bond market is a crucial audience for the Labour Party's annual conference [1] Key Event - The ruling Labour Party's politicians and members will gather for their annual conference next week [1]

Market Trends - A surge of issuers from mainland China, Hong Kong, and Macau are returning to the offshore public bond market [1] - Companies are capitalizing on low borrowing costs [1]

Joining us now for a look at the US economy and the Fed, Larry Lindseay, president, CEO of the Lindsey Group, former National Economic Council director. He's been mentioned as a possible uh Fed chair nominee. Uh it's been a while. Uh Larry, it's good to see you. >> Good to be here.>> You worry, and we'll just talk near-term about uh about the Fed. You worry that perhaps like uh 2024 that if you cut on the short end that might not be translated into lower rates on the long end might actually be uh actually c ...

Group 1 - The core viewpoint is that the probability of the domestic central bank following the Federal Reserve in cutting interest rates has increased, with a higher likelihood of implementation after the end of October [1][4] - External constraints are weakening, creating a "maneuvering space" for monetary policy, as the narrowing of the China-US interest rate differential reduces the risk of capital outflow, thus opening a window for monetary easing [2] - The current low net interest margin of commercial banks and rising real interest rates pose internal constraints on further interest rate cuts, making the central bank cautious about comprehensive rate reductions [3] Group 2 - The bond market is showing signs of stabilization after three months of adjustments, and there is an expectation for a new round of smooth declines in bond market rates entering the fourth quarter [1][4] - Investors are advised to prepare for defensive strategies and consider entering the market around the 10-year government bond yield of 1.8% [1][4]

Market Risk - Dutch pension funds' delayed transition to new rules poses a risk to a favorite bond market trade [1] Source - Societe Generale is the source of the information regarding the risk [1]

Core Viewpoint - The company emphasizes providing actionable and clear investment ideas through independent research, aiming to help members outperform the S&P 500 and avoid significant losses during market volatility [1] Investment Strategy - The company offers a service called Envision Early Retirement, which delivers at least one in-depth article per week focused on investment ideas [1] - The approach has reportedly enabled members to achieve better performance than the S&P 500 while mitigating risks associated with extreme market fluctuations in both equity and bond markets [1]

Interest Rate Policy - Bank of England maintains interest rates at 4% [1] Quantitative Tightening (QT) - Bank of England slows the pace of QT to £70 billion [1] Bond Market Strategy - Bank of England will sell fewer long-term gilts, with long-dated bonds accounting for approximately 20% of sales [1] Global Bond Market - Adjustments to central bank balance sheets and the handling of long-term rate issuance are occurring globally [2]

Market Outlook & Fed Policy - The market has priced in many positives, leaving room for the Federal Reserve to disappoint next week [2] - The key focus will be on the Summary of Economic Projections (SEP) and the committee's rate guidance for the end of 2026; a convergence with the rates market is needed to avoid disappointment [3][4] - A weakening labor market is a defining macro characteristic, suggesting growth-side risks for the equity market and the need for a bond position [10][11] Investment Strategies - Broadening investment portfolios beyond tech is recommended, considering areas like small caps, energy, and international markets [6][7][8] - Small caps are poised to benefit from declining interest rates due to their floating rate and short-term debt structures, along with less regulation and more M&A activity [7] - Offsetting equity positions with a bond position (duration) is suggested, especially given the potential for a pullback in the second half of September [9] Interest Rate & Bond Market - The market anticipates a 25 basis point rate cut next week [2][3] - The yield curve is positively sloped now, suggesting that rates across the curve should come down as the Fed starts its rate-cutting cycle, unlike the previous year when the yield curve was inverted [16][17] - Expect the 10-year Treasury yield to break below 4%, surprising many due to recency bias related to the bond market's reaction to previous rate cuts [18] Economic Indicators - Despite concerns about the labor market, other data points like GDP growth, company earnings, and consumer strength suggest a continued strong economy [13]

Market Trends & Dynamics - US equities are rallying, with some reaching all-time highs, driven by expectations of Federal Reserve rate cuts and softer inflation data [1] - The US Treasury yield curve is undergoing a twist steepening, with short-term yields falling and long-term yields remaining stable or edging higher [1] - The US dollar is weakening amid the yield curve dynamics [2] Investment Opportunities & Potential Risks - Bond and currency markets appear to be signaling a more cautious or mixed outlook compared to equities, highlighting potential cracks that equities seem to be overlooking [1][2] - Concerns over inflation, fiscal deficits, and rising Treasury supply contribute to the stability or increase in long-term yields [1] Financial Performance & Indicators - The spread between the 2-year and 30-year Treasury yields has widened by approximately 44 basis points since the start of 2025, reaching post-2022 highs [2]