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With the Pacific G10 Macro Rates Team 
Chinese equities rallied strongly last week, posting a 7.6% gain. US yields were less impressive, the US 30y rallied over 16bp at one point and there was also a significant flattening of the yield curve. These moves in US yields were despite a very large net issuance of 94bln (estimated) and the previous Friday’s very positive jobs number.  

CIO Monthly View with Will Bartleet, CIO and multi-asset portfolio manager at Pacific Asset Management

Markets continued to move higher in June although volatility returned as COVID-19 infection rates picked up sharply in some US states. Whilst new cases continue to decline in most of Europe, America is much more bifurcated: outbreaks are falling rapidly in the states that were worst affected in March and April, while states such as Texas, California, Florida and Arizona are seeing a rapid increase in new cases. 

With the Pacific G10 Macro Rates Team 
Fear and pessimism returned to the financial markets last week with risk assets underperforming against the safe havens. Despite the positive data coming out from the G10 economies sending the Citi Economic Surprise index to the highest levels since early 2018. Fears of a second wave in the US were increasing all week as new COVID-19 cases continued to soar in the Southern States. 

With the Pacific G10 Macro Rates Team 
Last week financial markets traded in a clear risk-off fashion with risk assets (equities, credit, commodities) underperforming and safe havens performing strongly (government bonds, JPY and CHF). 

As fears about the second wave in the US and China escalated over the week, risk assets repriced sharply lower, with the S&P 500 experiencing the worst 1-day performance since March on Thursday. On the week, the S&P 500 was down 5%, WTI down almost 8% and 10y yields in the US 0.2% lower at 0.7%. 

Pacific Asset Management and Fidelius Group announce major strategic partnership
Read the full press release below

Pacific Asset Management (PAM), the core asset management business of Sir John Beckwith’s Pacific Investments Group, and Fidelius Group, the independent Chartered Financial Planning firm, announce they have entered into a strategic partnership. The deal represents the largest undertaken by Pacific Asset Management to-date. Fidelius Group, headquartered in Bath, advises on £1.5bn of assets.  

With the Pacific G10 Macro Rates Team 
Last week economic data joined fiscal and monetary authorities in driving financial markets, probably the first time since the start of the pandemic. The ECB surprised markets by extending the Pandemic Emergency Purchase Programme (PEPP) by EUR 600bn and announcing reinvestments. This led to a significant rally in the periphery vs. core countries, adding to the bullishness from an additional fiscal stimulus (including temporary VAT cut) announced by Germany earlier in the week.  

CIO Monthly View with Will Bartleet, CIO and multi-asset portfolio manager at Pacific Asset Management

Markets continued to recover in May as the impact of global shutdown became apparent in the economic data released over the month. In the US, the jobless rate tripled to 14.7% the highest level since the 1930s whilst retail sales slumped, falling 16% over the month. In the UK, the Bank of England forecast the weakest economic growth in more than three hundred years with the economy expected to shrink by 14% despite an expected rebound in the second half of the year. 

With the Pacific G10 Macro Rates Team 

Global Macro Overview
Risk assets again performed strongly last week. The S&P500 increased by over 3%, matched by the European and global equity markets, while WTI oil was 5% higher. There are a lot of reasons in the short-term for the optimism that financial markets have been pricing recently. Economies are gradually coming back to life across the globe and unprecedented fiscal and monetary stimulus in most developed nations are still in place.  

Latest G10 Macro Rates Blog
With Shayne Dunlap, Co-Portfolio Manager

Humans have an innate ability to hope – to believe things will be better in the future than they are currently. This has been an important factor in our species surviving and ultimately thriving as the dominant one on this planet. It also has the side effect of manifesting itself in the financial markets. 

With the Pacific G10 Macro Rates Team 

Global Macro Overview
Volatility continued to decline last week. The key themes remained unchanged: risk assets rebounded as economies started to re-open with the S&P 500 up 3.5% on the week, WTI up 12.5% to above $33, Credit spreads were tighter across the board and 10y Government Bond yields remained mostly unchanged.