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Low interest rates create an opportunity for lenders to launch longer-dated fixed rate mortgages and scrap Early Repayment Charges.
With all the talk on fallbacks, pre-cessation triggers and term rates you might think we were approaching the end game for London Interbank Offered Rate (LIBOR). But is the industry clear how LIBOR will be dealt its knockout blow, or how it will stagger on?
Growing the ESG product suite
While sustainable finance for many people is still synonymous with green bonds, over recent years we've seen widespread innovation within the ESG financial product spectrum.
Is global growth poised to weaken further? Yes.
Against the current backdrop of central bank action and a resurging demand for fiscal policy, the global slowdown is a hot topic for investors. Here’s why we see weaker growth manifesting across the key regions in the coming year.
LIBOR - back to the future
Does the past impact the future, Doc? Lots of excitement in GBP Basis of late after the International Swaps and Derivatives Association (ISDA) finally launched the consultation into the fallback parameters.
Release the pressure: Why Europe’s power players must now act to ease fiscal constraints
At September’s meeting of the European Central Bank (ECB), the call for more fiscal policy was loud and constant. The word ‘fiscal’ came up again and again.
The time wasn’t right for the Bank of Japan. All eyes on October.
As expected, the Bank of Japan bucked the global trend for stronger easing and made minimal changes when they met on Thursday 19 September. Why, and what does this mean in practice? And which decisions are on the horizon?
Brexit Tracker: The rocky road to a General Election
The Brexit process is approaching a crucial phase. Here’s what we are tracking – and expecting – over the next few weeks.
Asia: The ESG nexus moves East
It never fails to surprise people that the biggest market for green bonds is China with a total green bonds volume of over $110 billion (Dealogic).
20 months since MiFID II – what’s changed?
Is fixed income voice execution on an unstoppable path to extinction? Or can it just adapt to this new normal with greater efficiency?
Is the euro in safe hands?
In the past, the People’s Bank of China had the potential to alter the euro’s direction, but this looks set to change. Here we explain how and why, as well as where the euro might be heading as a result. Some of the answers are enlightening – and surprising.
Changing seasons: What’s the outlook for the rest of 2019?
The first half of 2019 was a pretty unique period for financial markets. And so much for a ‘quiet summer’ – August volatility was the equivalent of a perfect storm… What’s in store for markets and investors over the months ahead?
Climbing the foggy mountain of sustainability
We’ve recently seen laudable initiatives to develop a universal green language such as the EU taxonomy, which provides detailed eligibility criteria for economic activities that...
Stress over China reaches new highs
Investor sentiment for China has plummeted. Our proprietary China Stress Index paints the picture…
Loan market IBOR credit adjustment - look forward before you look back
On 7 August 2019, the Loan Markets Association (LMA) published a guidance note highlighting considerations in respect of the application of credit adjustment...
Italian Government crisis explained.
A political crisis in Italy is now in full swing. When will there be an election? What impact does this have on the outlook for the Italian economy and markets?
The EU benchmark space is getting a bit crowded.
So what are the plans for all these benchmarks jostling for attention? We set out below some of the key changes coming down the line...
Delay? What delay? Margin final phase kicked out by a year.
With many market participants wrestling with the final phase of margin requirements for non-centrally cleared derivatives for next year, the market...
While England demolished the blockers in their path to World Cup glory, our customers have their own blockers to SONIA adoption.
Calculating compounded realised rates can be a challenge. Whilst the Quants are familiar with the International Swaps and Derivatives Association (ISDA) formula below as a mainstay of overnight index swap (OIS) calculations, the wider market might be...
Has the loan market "Realised" SONIA's potential?
In March, we highlighted that whilst the derivative and bond markets had made great progress in embracing SONIA, the loan market was yet to take the leap with a "Realised Rate" product. We discussed the need for term rates and challenged the market to...
GFXD event highlights career opportunities for women in FX
Simon Manwaring, Global Head of Foreign Exchange (FX) and Chair of the Global FX Division (GFXD) of the Global Financial Markets Association (GFMA) opened the first of its kind GFXD event “Next Step FX: Promoting Career Opportunities for Women in Foreign Exchange”.
Green halo 2.0
It has been rewarding to see that the “Green Halo effect”, which we at NatWest Markets first introduced in early 2018 has become part of common market parlance.
Global trade off: economy slips as protectionism rises
The economic impact of the trade war (thus far) has been limited, due largely to efforts by the Trump Administration to avoid tariffs on consumer-related goods.
The Fed: Rate cuts in 2019
Employment growth cooled noticeably in May, supporting our view that the Fed will cut rates in 2019, lowering the funds rate by 25 basis points at both the September and October Federal Open Market Committee (FOMC) meetings.
Introducing our China Stress Index
NWM has created a China Stress Index (CHSI) to capture investors’ general level of concern towards China (e.g. perception of the growth and policy outlook, reaction to discrete events, various news headlines and/or critical data releases etc).
A green prospectus make-over
“How do I know whether this bond is green?” is a recurring question I get asked. Your typical port of call – the prospectus – does not always offer solace.
Risky assumptions putting markets at risk?
As trade tensions between the US and China rise, and doubts grow about the sustainability of the US expansion and the recovery in Europe, government bond yields in both regions are falling to recent lows.
Greeniums and “Halo” effect – green bonds make financial sense
I took part in a panel at this year’s Climate Bonds conference, discussing the latest evidence around green bond pricing in the primary and secondary markets.
Litigation fears reduce green issuers’ appetite for the US market
“Why is the $ green bonds market still so small?” is a question clients regularly ask us, pointing to the fact that while the US is the world’s leading green bonds issuer...
IBOR transition - fasten your seatbelt it could be a bumpy ride
As we wrote in February post an FCA speech, the ‘do nothing’ strategy of waiting for fallbacks could result in market chaos.
Equity market remains resilient despite recession fears
The Fed has lowered its growth outlook for the US Economy, and in March signaled an expectation they will likely not raise rates again this year...
IBOR Reform: Ringing the bell for the end of term?
As reiterated by the FCA last month, the production of LIBOR is likely to end in 2021 and all markets need to transition to the replacement Risk Free Rates (RFRs) or face ‘chaos’….
New horizons and the human touch
When NatWest Markets lifts its eyes to the horizon, what does it see? It sees emerging, disruptive technologies in the distance...
Margin for non-cleared - €8bn or €50m?
Following on from my recent Margin & Clearing note there seems to be signs of pragmatism through an IOSCO statement yesterday.
Kick-start your international expansion now - a simple guide
With 70% of European online shoppers buying products from international retailers, selling cross-border seems a compelling proposition. And there is further good news: selling to an international audience has never been more straightforward.
“The green heart of UK debt investors”
Sustainability is becoming increasingly core to the operations of top tier UK debt investors. This is the key takeaway from meetings we have held over the past weeks with the investment community.
Margin & clearing regulation: close but no cigar?
Behind the scenes the industry is scrambling on readiness for the final phases of Initial Margin and EMIR Clearing. There is however confusion on scope, requirements and whether the effort will be worth it. So where are we?
FOMC Statement: Our view
This week the Fed surprised markets with a very dovish message, signalling policy could be on hold for an extended period.
The US-China Trade Relationship: What next?
The US-China trade relationship has been steadily deteriorating since early July of 2018, when President Trump finally followed through on threats to impose tariffs on Chinese goods.
Mexico City Airport: “The green bond that was no longer”
When Mexico City Airport Trust issued $6 billion of green bonds in 2016 and 2017 in order to finance the construction of a new airport...
A case of “green humbug”?
In recent weeks we have noticed a fresh wave of concerns and mixed perceptions around the Green Bond Market, which can be broken into four key themes...
New SNAM framework and the green-gas debate
As “browner” sectors continue to find appropriate ways of embracing sustainable finance, it is worth highlighting a new landmark framework, the SNAM Climate Action Bond Framework, which Europe’s leading gas utility firm – and one of Italy’s largest companies – has published beginning of November.
ESG Market Dynamics - The green bond wave
October has seen a wave of green bonds, lifting the volume of green issuances in the third quarter of 2018 to USD 29.7 billion. The very busy month has helped to boost the total of green bonds issued this year to USD 108.3 billion, less than 1% behind the 2017 figures for the same period.
What’s up with ESG ratings? Better access to the capital markets, that’s what.
Dr Arthur Krebbers, NatWest Markets Green Finance Co-ordinator, explains why companies should consider their Environmental, Social and Governance profile as a core part of their treasury operations.