Daily Management Review

Thiel From BlckRock Sees Italian Bond Yielding ‘More Market-Friendly Outcome’


09/21/2018


Theil turns more positive towards dollar, as he sees Brexit situation to “become more positive”.



The largest asset manager in the world, BlackRock has made a recent move to a “long position in Italian bonds” as it expects an outcome which will be “market-friendly” to the “budget discussions”. The said information comes from the Deputy Chief Investment Officer of “fixed income” at BlackRock.
 
The recent “violent gyrations” experienced in the Italian markets stemmed from fear of the “coalition government” going on a “spending binge” which will make the debt burdens heavier for the country. Although, to some extent the fear has subdued the Italian trade yield still remain above that of “other southern European” countries.
 
According to Reuters:
“Ten-year Italian yields stand around 2.87 percent compared to 1.5 percent in Spain and 1.8 in Portugal IT10YT=RR ES10YT=RR PT10YT=RR”.
 
Scott Thiel from BlackRock told the media that the debt of Italy “offers an attractive valuation, especially versus other peripheral markets”.
“The Italian situation seems to be moving towards a more market-friendly outcome”.
 
Many government officials who hold high posts stated that the government would abide by the “fiscal discipline” of the EU when conducting its “ongoing budget talks”, while it is said that the “Economy Minister Giovanni Tria”, is going to hold firm on retaining the “budget deficit” under check. In Thiel’s words:
“In our opinion, the two parties are more conscious of how to implement their policies within a European mandate”.
 
Thiel also confirmed turning “more positive” towards British pound, as he saw it higher while nearing teem direction. He said:
“It does appear that the Brexit situation has become more positive”.
 
In fact, he sees “a level of $1.35” a possibility if Britain manage to land an agreement on “trade deal” for Brexit with the EU by the coming March. At present, sterling is being traded around “$1.31 GBP=D3”. In the post month it has rallied nearly 4%, while reports states that both the parties were close to formulating a Brexit agreement.
 
Moreover, the emerging market selloff is an “overdone” thing for Thiel, while the sector has taken a “strong dollar” blow this year with the brewing fear of a “global trade war”.
 
 
References:
reuters.com







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