Brexit-commentaar door Jamie Stuttard, Robeco

Brexit-commentaar door Jamie Stuttard, Robeco

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Onderstaand het commentaar van Jamie Stuttard, hoofd Global Macro Fixed Income bij vermogensbeheerder Robeco, op de nieuwste Brexitdeal tussen de EU en het Verenigd Koninkrijk.

Bullet points as of Thursday 17th October 1600hrs:

•The Gilt market has been more than twice as volatile as Greek government bonds lately, in terms of yield ranges. Who knew that in October 2019 the place to go for political stability and low volatility was Greece? For those with a need for investment grade, Italy has been a consistent performer the last couple of months, again turning traditional conventions of sovereign bond market volatility on their head. 

•In the short-term, Saturday’s vote is clearly crucial as political analysts weigh up the probability of the Prime Minister having the numbers to pass the deal.

• We think the scenarios in the Gilt market are still quite asymmetric: while it might be an outside chance, should the House of Commons fail to ratify the deal and should the UK then leave the EU without a deal, 10yr Gilt yields can easily go negative. In that scenario – a reactivation of QE from the Bank of England in November is likely. In Q3 2016, after the UK’s EU Referendum, that ignited a tremendous search for yield in Fixed Income. So all eyes on Saturday.