António José Duarte’s Post

With the Olympic Games in Paris, Euro 2024 in Germany, and Swifties on tour, plus a surge in summer travels, Europe is set for a bustling summer. Increased consumer spending, higher demand for services, and travel-related costs contribute to inflationary pressures, making it very hard to sustain inflation below 3% at the end of summer. The timing of the next 25bp interest rate cut in Europe also depends on these. #Economy #Inflation #Europe2024 #InterestRates #Tourism #Events #Economy #Inflation

History doesn't repeat itself, but it often rhymes Credit agencies have mis-rated more than $100bn of commercial real estate debt in an increasingly popular segment of the market, say mortgage veterans, including at least a dozen deals that maintain top investment-grade ratings even though the borrowers are in default. #commercialrealestate #debt #rating Source:Financial Times https://lnkd.in/dDHt3Kue

Swiftflation.

Heightened risk perception among investors. Yesterday´s resignation of President Emmanuel Macron has sent shockwaves through the financial markets. The yield on the 10-year French bond surged more than 10 basis points, marking a sharp increase in investor anxiety. This spike has widened the spread over the equivalent German bonds to its highest level since March 2020, reflecting a growing preference for the relative safety of German debt amidst the political uncertainty in France. #debt #risk #yield #France Image source : Bloomberg

Are we looking at a "no landing" scenario? With a staggering 272,000 new jobs created in May, far exceeding the predicted 180,000, the landscape of interest rate cut forecasts has dramatically shifted. Just 5 months ago, markets were pricing in SEVEN interest rate cuts for this year. Fast forward to today, and we see a much more conservative forecast: markets are now fully pricing in only one 25 basis point cut in December. With US banks registering a significant increase in unrealized losses on securities in Q1 2024 amounting to $516.5 billion and assets held by banks in problems rising $15.8 billion to $82.1 billion, keeping a higher-for-longer monetary policy will likely exacerbate financial strains. #Economy #InterestRates #JobReport #FED #Finance Source : CME Group

No landing ? FDIC Quartely Banking 1Q2024 report, highlights a significant increase in unrealized losses on securities for the first quarter, amounting to $516.5 billion. This represents an increase of $38.9 billion, or 8.2 percent, from the fourth quarter of 2023. The primary driver of this increase is the higher unrealized losses on residential mortgage-backed securities, which account for almost 95 percent of the total increase in unrealized losses. The surge in unrealized losses is primarily driven by a sharp rise in mortgage rates during the first quarter. As mortgage rates climbed, the market value of existing residential mortgage-backed securities plummeted. Investors, drawn to new issues offering higher returns, found the older, lower-yielding securities significantly less appealing. This shift exerted substantial downward pressure on the value of these investments, drastically increasing unrealized losses. Mortgage Backed securities...again? Source:Federal Deposit Insurance Corporation (FDIC) #banks #FinancialReport #UnrealizedLosses #Securities #MortgageBackedSecurities #InterestRates #bonds #FinancialMarkets