 Welcome to FIGS Weekly Economic and Trading Update, I'm Mark Bailey and this is Jessica Russett. Last week geopolitical tensions played out across the markets and there was also the announcement from Theresa May calling that early UK election. What did you see in the economic data? Yeah so it was more about geopolitical concerns last week and you know that they've been continuing again overnight. We've seen the terror attack probably in Paris with the shooting of the policemen but back to the UK, I mean people say it was a surprise but I guess I've been talking about it since November last year as a possibility. You know you look across the benches in the House of Parliament you see a very weak Labour party almost unelectable under Jeremy Corbyn and you know it's no surprise that she's decided to call a snap election to try and strengthen her hand in terms of the Brexit negotiations with the EU. In terms of impact on financial markets we did see Stirling strengthen quite considerably on the back of that announcement and also a bit of a rally in guilds as well. That's kind of reversed slightly over the last couple of days as the markets have digested that. In terms of the key economic data out of the States we saw a pretty weak CPI print out of the States well below consensus and that has a fairly big impact in terms of what we're seeing in US Treasury yields. Over the last month they've rallied around about 20 basis points in the 10 years and similar amounts across the curve as well. So there's been a fairly significant move and that's also played out in Australia where we've seen similar moves in in the curve a lot lower as markets and bonds have rallied. So there's been some pretty significant moves. There's been a bit of a risk off trade as those geopolitical concerns continue obviously North Korea and the US situation there and the tension there. So investors are taking a bit of profit out of equities and putting those into the safe haven assets of government bonds. So Jess in terms of the the risk off trade that we've been seeing more broadly globally have fixed clients been doing a similar type of transaction? Yeah we are actually seeing that come through where they are comfortable with the credits and their portfolios but they are certainly looking at the exposure and moving into maybe higher rated paper. One in particular is the residential backed mortgage security bonds that we traded last week. It was Rezimac 2016 the 2c tranche Rezimac is a non bank lender and so this is a floating rate note bond so it's a good positioning for clients that do believe that this yield steep yield curve steepening will be coming through and it's also a high rated bond as well so that also is a really good positioning as well. We also had last week access today come to market and launch a fixed rate bond this is a fig originated bond this is a callable from 2018 and it's got a 2021 maturity. Clients of ours will be familiar with access today they came to market in 2015 with a floating rate note bond so this is a fixed sorry this is a short dated bond and it's also has the high yield component to it as well so this was ideal for clients that were chasing yield but also wanted to shorten that duration as well and move you know into the shorter end of the curve with any possible you know steepening we may see coming through and I think that's certainly what we've been telling clients to you know get their extra additional income coming through from going down the credit spectrum and shorting the duration that's certainly the case and in terms of the RMBS again you know there's incredible value in my view in that investment grade rated space the shorter dated again while our average life is very short as well two three years and you get a better kind of yield in terms of any credit rating that you want to compare that to in the corporate space so I think that's a certain sector that investors should be looking at heavily to diversify their portfolios and also get additional yield. Yeah that's right and there was also a bit of activity in the US denominated space as well we had some buybacks announced from Bamminco and Broad Spectrum as well which we have holders of those and so Bamminco has called its 2018 maturity bond and that's using the proceeds from a recently issued 2022 maturity bond and then Broad Spectrum called their 2020 bond so we have institutional bids for both of these bonds and so this allows investors to sell their positions now and reinvest those funds. So again it's kind of good news from investors getting the cash back which is always good to get your principal back from the company but again it kind of leads that refinancing risk and that refinancing problem where do I invest that cash going forward. Yeah that's right and we have you know we're coming across looking for new direct bonds to to have really good investment opportunities to present to clients there. Next week all eyes will be on the domestic CPI release and what figures are we expecting to come through with. Yeah so the headline figures are consensus is at the moment 0.6 percent for the kind of the core or the RBA's preferred measures we're looking at both the 0.5 for the trimmed mean and weighted median in terms of those figures there. Apart from that it's a pretty light week in terms of data in Australia offshore I think most people will be looking for Friday next Friday's release of the US GDP figure which is expected to come in in Q1 at 1.2 percent so considered will be lower than the 2.1 percent recorded for fiscal year 16 but again there's been quite a big divergence there in terms of what is actually expected so I think most eyes will be beyond that and that will kind of give a bit of guidance as well for underlying US Treasury yields for the next month or so. Thanks Jess. Thanks Mark. Thanks for watching 10 Hats On and Joy. 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