Moving Markets

With yields at historically attractive levels and the yield curve offering attractive opportunities, fixed income is drawing renewed attention from investors seeking both income and capital preservation. But is the short end of the curve really as appealing as it seems—and what should investors know about the risks and rewards?
In this episode, Ayako Lehmann, Head of Webcasts & Video at Julius Baer, is joined by Roman Frey, Head of CIO Office Global Fixed Income and voting member of the Fixed Income Investment Committee. Together, they explore why fixed income deserves a place in every portfolio, the importance of duration, credit risk, and liquidity, and how macroeconomic factors and central bank policy shape the opportunity set. The conversation covers the dynamics of the primary and secondary bond markets, the role of market technicals, and why short-dated bond strategies may offer a compelling alternative to cash and money market funds. Roman also discusses the impact of the Federal Reserve’s evolving communication style under Kevin Warsh, the practicalities of managing strategic cash, and why now may be a particularly attractive time to lock in yields.

(00:00) - Introduction

(01:28) - Is fixed income really boring?

(04:39) - Understanding duration and credit risk

(06:53) - Liquidity and the importance of the primary market

(10:08) - Macroeconomic factors and central bank policy

(12:40) - Market technicals and the impact of supply and demand

(14:03) - Hyperscalers and the shape of new bond issuance

(16:31) - Cash versus bonds—what investors should consider

(20:34) - The Fed’s new communication style and implications for investors

(23:08) - Is short duration the right approach now?

(25:27) - What makes short-dated bond strategies attractive?

(28:28) - Managing short-dated bonds: hold to maturity or switch?

(29:48) - Risk and return trade-offs in short-dated strategies

(32:21) - Investment horizon and the role of strategic cash

(34:51) - Yield curve steepness and the roll-down effect

(36:16) - Is now a good time to invest in bonds?

(38:23) - Closing and legal information

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NVIDIA added USD 442 billion to its market capitalisation yesterday, with gains spreading beyond chipmakers into software and cybersecurity stocks amid strong earnings releases. Political uncertainty and debt concerns weighed on French markets ahead of the country's first presidential debate yesterday evening. A two-year Japanese government bond auction saw relatively weak demand amid growing expectations of Bank of Japan tightening next month. Reports suggest Venezuela may leave OPEC, potentially weakening the organisation's influence. The focus today is on Kevin Warsh's highly anticipated Jackson Hole speech. What can we learn from past speeches by Fed presidents at Jackson Hole? Tim Gagie, Head of FX Advisory in Geneva, discusses the USD debasement trade and what he is seeing in markets amid widespread claims surrounding the theme.

(00:00) - Introduction: Helen Freer, Product & Investment Content

(00:27) - Markets wrap-up: Mike Rauber, Product & Investment Content

(07:06) - FX & metals update: Tim Gagie, Head of FX & Precious Metals Sales Geneva

(11:17) - Closing remarks: Helen Freer, Product & Investment Content

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Markets traded largely sideways ahead of the earnings release from NVIDIA, the world’s most valuable company by market capitalisation. After the US market close, the company once again exceeded expectations, delivering stronger-than-anticipated guidance and sending its shares more than 4% higher in after-hours trading. Elsewhere, US inflation data came in slightly above forecasts, prompting a modest rise in Treasury yields. In today’s episode, we welcome Carsten Menke, Head of Next Generation Research, to discuss the outlook for the copper market, the key forces shaping supply and demand, and where prices could be heading next.

(00:00) - Introduction: Helen Freer, Product & Investment Content

(00:28) - Markets wrap-up: Roman Canziani, Head of Product & Investment Content

(05:47) - Copper: Carsten Menke, Head of Next Generation Research

(10:03) - Closing remarks: Helen Freer, Product & Investment Content

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Markets found their footing yesterday despite an intensification of US sanctions on Iran, as traders focused on the shift towards economic rather than military pressure and the resulting decline in oil prices. Equity markets generally moved higher, led by gains in technology shares, while Germany’s stronger-than-expected economic growth figures added to the constructive backdrop. Attention now turns to today’s US inflation data and Nvidia’s earnings report, two events that could shape the market direction in the days ahead. Dario Messi, Head of Fixed Income Research, shares his views on Treasury buybacks, fiscal policy and the outlook for US yields and the US dollar, while Mathieu Racheter, Head of Equity Strategy Research, assesses whether recent moves in bond markets are beginning to influence equity valuations.

(00:00) - Introduction: Helen Freer, Product & Investment Content

(00:34) - Markets wrap-up: Lucija Caculovic, Product & Investment Content

(06:58) - Bond market update: Dario Messi, Head of Fixed Income Research

(11:20) - Equity market update: Mathieu Racheter, Head of Equity Strategy Research

(15:19) - Closing remarks: Helen Freer, Product & Investment Content

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Both the S&P 500 and the Nasdaq Composite ended Monday's trading session lower as chip stocks faltered, while the Dow Jones gained 0.25% on the day. It was a similar story in Asia this morning as investors digested the potential ramifications of 'Operation Economic Outcast', while awaiting not only Nvidia's and Marvell Technology's results and US PCE data tomorrow, but also a highly anticipated speech by Kevin Warsh at Jackson Hole this Friday.
Damien Ng, Next Generation Research, joins the podcast today to provide his take on the good news last week from the Moderna/Merck cancer trials. Tune in to the podcast to find out why he believes that innovation-driven healthcare remains one of the most compelling long-term investment opportunities.

(00:00) - Introduction: Lucija Caculovic, Product & Investment Content

(00:41) - Markets wrap-up: Bernadette Anderko, Product & Investment Content

(07:07) - How personalised vaccines could transform cancer treatment: Damien Ng, Next Generation Research

(12:23) - Closing remarks: Lucija Caculovic, Product & Investment Content

Would you like to support this show? Please leave us a review and star rating on Apple Podcasts, Spotify or wherever you get your podcasts.