Global Fixed Income Strategy Update– Jan 2020

Global Fixed Income Strategy Update
The latest views from Invesco Fixed Income
Key takeaways
Invesco Chief Economist, John Greenwood, explains the recent acceleration in US broad money growth, and what is behind it.
Our credit team provides an upbeat outlook for EM corporate debt.
In our Q&A, we speak with the Global Liquidity Team about how year-end repo market action played out.

An explanation of the recent monetary acceleration in the US

Measured on a year-on-year percent change basis, M2 and M3 growth have both been accelerating in the US since late 2018.

There are two main reasons why broad money growth acceleration has occurred, and in this article, we explain how both factors have contributed.

The first factor has to do with the banking sector and its responses to changes in financial regulation and US Treasury funding strategy, whereas the second factor is associated with the so-called shadow banking sector, which has for a long time been relatively dormant..

Read the paper to learn more

Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice. This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.