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The article discusses two separate research papers. The first paper examines the factors that influence changes in household asset allocation patterns, finding that three factors (long-term equity risk premium, credit premium, and municipal bond premium) explain 81% of the variation in rebalancing across asset classes. The second paper analyzes the impact of central bank announcements on interest rates and exchange rates during the COVID-19 pandemic. It finds that "whatever-it-takes" announcements had a greater effect on lowering bond yields compared to size-limited announcements, and that open-ended announcements had a significant impact on longer-term yields. The researchers caution that central banks cannot solely rely on whatever-it-takes policies in future crises. Additionally, the article briefly mentions another research paper that examines the effects of increased immigration enforcement on public safety, specifically among Hispanics. The study finds that the Secure Communities program led to a decrease in crime reporting among Hispanics and an increase in victimization rates. [Extracted from the article]

The European Central Bank (ECB) has announced stricter climate targets for its bond portfolio, signaling its intention to take action against companies that do not meet climate pledges. The ECB's Governing Council will set interim emission-reduction targets for its corporate portfolios, using the EU's climate benchmarks legislation as a guide. The ECB is taking a more proactive approach to addressing climate change compared to other major central banks. The announced targets will be used to track progress, and potential remedial actions will be considered on a case-by-case basis. The ECB has also expanded the scope of assets subject to a climate review, including public sector assets, covered bonds, and foreign reserves. The ECB's assessment shows a decline in emissions for corporate assets and other assets, excluding value chain emissions. Rising prices and inflation have had a positive impact on issuers' carbon efficiency. The ECB will work with standard-setting bodies to address the lack of a methodology for accounting for inflation. [Extracted from the article]

The European Central Bank (ECB) is taking steps to reduce the carbon footprint of its bond portfolio as part of its efforts to make its monetary policy more environmentally friendly. The ECB has stated that issuers reducing their emissions have contributed to this development. Additionally, the ECB estimates that around 20% of emissions cuts in 2022 and 2023 were a result of reinvesting in greener issuers. The ECB announced in 2022 that it would prioritize companies with lower pollution levels in its corporate bond portfolio, and it will now set interim emission-reduction targets for corporate sector portfolios. The ECB has also expanded the scope of its disclosures on assets held for monetary policy purposes. [Extracted from the article]

The credit markets have experienced a significant decline at the start of 2024, resulting in the loss of hundreds of billions of dollars in value. The combined value of high-grade and junk markets has decreased by $240 billion to $13.6 trillion, the lowest since December 13. This decline has been exacerbated by the rebalancing of bonds underlying the indexes at the end of last month. Credit-default swap indexes have also seen an increase in spreads, indicating higher credit risk. The reversal of the optimistic sentiment from late 2023 is due to central bankers' reluctance to cut interest rates and concerns about a potential wider conflict in the Middle East. The widening gap between global high-grade bond yields and sovereign debt further highlights doubts about rate cuts. The issuance of new corporate bonds is adding pressure to the market, as portfolio managers may have to sell old bonds to buy new ones. Despite the recent decline, the credit market's value is still higher than it was in late October. The market is expected to remain volatile until central banks confirm expectations of rate cuts. [Extracted from the article]

The credit markets have experienced a significant decline at the start of 2024, resulting in the loss of hundreds of billions of dollars in value. The combined value of high-grade and junk markets has decreased by $240 billion, erasing all gains made since December 13. Credit-default swap indexes have also risen to levels last seen in early December. This reversal of fortune follows the optimism of late 2023, when interest-rate cuts and economic growth were anticipated. However, central bankers are now hesitant to cut rates due to inflation concerns and the potential for a wider conflict in the Middle East. The market is expected to remain volatile until central banks confirm rate cuts. [Extracted from the article]

Corporate bond investors are taking advantage of high yields by purchasing new issues worldwide, anticipating potential interest-rate cuts by major central banks. Yield premiums on bonds in the Bloomberg Global Credit Corporate index tightened to their lowest level since January 2022. This trend is driven by strong US economic growth in the fourth quarter and expectations of rate cuts by central banks, which would lower yields. However, caution is advised as defaults for weaker firms are increasing and developers in many countries are under pressure. [Extracted from the article]

Corporate bond investors are purchasing new issues globally to take advantage of high yields before potential interest rate cuts by major central banks. Yield premiums on bonds in the Bloomberg Global Credit Corporate index tightened to the lowest level since January 2022. This tightening of global spreads follows better-than-expected US economic growth in the fourth quarter of 2023. However, caution is advised as defaults for weaker firms are increasing and developers in many countries are under pressure. Concerns about the Chinese economy have also affected investor sentiment towards Asian debt. [Extracted from the article]

European companies are expected to be cautious with bond sales in 2024 due to increased risks, including rising interest rates and market volatility. It is estimated that around €280 billion in euro-denominated investment grade non-financial corporate bonds will be sold next year, slightly less than this year. Companies will take advantage of selling opportunities, but they will also consider geopolitical tensions, central bank policies, and consumer spending. With higher borrowing costs and maturing bonds, firms will carefully assess their spending and debt reduction. The macroeconomic outlook may discourage companies from adding to their debt loads, even if rate cuts occur. However, if the European Central Bank cuts rates faster than the Federal Reserve, it could attract US companies to issue bonds in Europe. This year, non-financial corporate bond sales in Europe were 20% higher than last year but still lower than the record volumes in 2020. Consumer discretionary issuers, particularly carmakers, accounted for a significant portion of issuance. Overall, the outlook for non-financial corporate bond sales in Europe is expected to remain relatively unchanged, with yields remaining elevated and a growing structural drag on demand for financing. [Extracted from the article]

Stocks and bonds rallied after the Federal Reserve indicated that interest-rate cuts are likely next year, leading to a positive market response as inflation eases. Global stocks and equity futures rose, with Apple Inc and the Dow Jones Industrial Average reaching record highs. The dollar weakened, while the yen and other emerging market currencies strengthened. Traders are now awaiting the Bank of England and European Central Bank meetings to determine if a global easing cycle is imminent. Treasuries and global corporate bond spreads tightened, indicating a bullish sentiment. [Extracted from the article]

Stocks and bonds rallied after the Federal Reserve indicated that there would be interest-rate cuts next year, leading to a positive response in markets as inflation decreases. Global stocks and equity futures rose, with Apple Inc and the Dow Jones Industrial Average reaching record highs. The dollar weakened, causing the yen to strengthen, while global corporate bond spreads tightened. Traders are now awaiting the Bank of England and European Central Bank meetings to determine if a global easing cycle is imminent. [Extracted from the article]

Corporate bond market stands at its strongest point with more FIG deals expected, though higher new issue premiums eyed [ABSTRACT FROM AUTHOR]

Issuance likely to resume next week after two day break [ABSTRACT FROM AUTHOR]

The ECB's "climate talk" explains about half of the change in the average greenium - the higher price ESG bonds demand over conventional equivalents - over the last 12 months, according to an Allianz report Tuesday. (Bloomberg) -- The European Central Bank's climate ambitions are already having an impact on the sustainable bond market, according to research from Allianz SE. [Extracted from the article]

Despite headline inflation coming off euro-era highs in recent months, ECB officials are adamant that monetary policy must be tightened further to tackle underlying price growth that quickened to a record in December. (Bloomberg) -- European Central Bank Executive Board member Isabel Schnabel said borrowing costs must be lifted much further, with inflation only just having dipped back into single digits. [Extracted from the article]

The ECB, which on Thursday delivered an historic 75 basis point interest-rate increase in an effort to tame record inflation, has gradually broadened the scope of its climate initiatives. (Bloomberg) -- A group of 12 nonprofits has asked the European Central Bank to set more ambitious targets around plans to tilt its corporate bond program toward greener issuers. [Extracted from the article]

Despite the stresses of a devastating energy crisis, surging inflation and central bank policy tightening, stock market valuations remain above levels hit during the Covid-led selloff in 2020 and the 2008 financial crisis. Such positioning is about to face multiple reckonings, from the mounting energy crunch, a jumbo 75 basis-point European Central Bank rate hike on Thursday -- and more to come -- and subsequent downgrades to earnings estimates that strategists at Citigroup Inc. say are coming. Energy Crisis Investors are most worried about the lasting impact from the energy crisis, which is hitting the economy from multiple angles. [Extracted from the article]

Sales across the region's primary debt market are running more than 20% behind last year, while just a handful of non-financial companies are raising new debt as funding costs climb. (Bloomberg) -- The risk of a prolonged gas-supply crunch could unleash a drought in Europe's credit market that a bigger-than-expected European Central Bank hike won't fix. [Extracted from the article]

(Bloomberg) -- The risk of a prolonged gas-supply crunch could unleash a drought in Europe's credit market that a bigger-than-expected European Central Bank hike won't fix. That's bad news for firms needing to raise debt, with the dip in non-financial issuance already so severe that this July is set to be the slowest for corporate debt deals on record, according to data compiled by Bloomberg. [Extracted from the article]

Keywords: 2539Z@GR; ENI@IM; SHEL@LN; ALLTOP; BON; BUSINESS; CLIMATE; CMD; ECB; EUROPE; EURTOP; FRX; GEN; GOV; MARKETS; NRG; TOP; WORLD; WWTOP; WWTOPAM; WWTOPEU EN 2539Z@GR ENI@IM SHEL@LN ALLTOP BON BUSINESS CLIMATE CMD ECB EUROPE EURTOP FRX GEN GOV MARKETS NRG TOP WORLD WWTOP WWTOPAM WWTOPEU (Bloomberg) -- The European Central Bank's decision to use its corporate bond program to penalize companies that pollute is set to alter the debt financing landscape, according to Jo Richardson, portfolio strategy head at the Anthropocene Fixed Income Institute. The ECB intends to rejig its corporate bond portfolio to favor issuers that pollute less, marking its most significant shift yet to bring environmental considerations into monetary policy. [Extracted from the article]

The European Central Bank will "tilt" its corporate bond holdings towardissuers that demonstrate a "better climate performance", marking itsmost significant shift yet to weave environmental considerations intomonetary policy. The ECB's Climate Tilt: * The measures -- which will initially apply to non-financialcorporations -- will take effect from October, with further detailsto be announced in the interim, the ECB said. [Extracted from the article]

In Europe, wagers on two 50-basis-point rate hikes by the ECB is causing a slump in bond prices. (Bloomberg) -- A key indicator in Europe's credit market is signaling that there's trouble ahead for junk bonds. Elsewhere in credit markets: EMEA Europe's primary bond market stayed quiet on Monday as asset prices plunged across the board. [Extracted from the article]

Elsewhere in credit markets: EMEA Media and Games Invest's 175 million euro floating-rate note was Friday's only addition to the weekly tally of 31.5 billion euros in Europe's primary bond market. (Bloomberg) -- Bonds denominated in the world's leading currencies are suffering double-digit losses following the European Central Bank's decision to end quantitative easing. [Extracted from the article]

The ECB said that when looking at financing conditions for various types of collateral in securities financing transactions, survey participants reported a mixed picture in regards the maximum amount of funding offered against euro-denominated collateral. The European Central Bank (ECB) on Tuesday published results of a recent June 2023 survey on credit terms and conditions, focused on euro-denominated securities financing and over-the-counter derivatives markets (SESFOD). [Extracted from the article]

"The ECB's end of QE will fuel a material increase in the net supply of fixed income securities that will be available to private investors", Amanda Lynam, senior credit strategist at the U.S. investment bank, said in an interview. (Bloomberg) -- The end of European Central Bank corporate bond purchases is not yet priced in to euro investment grade spreads, which could widen by as much as 20 basis points this year, according to Goldman Sachs Group Inc. strategists. [Extracted from the article]

BlackRock's IEAC ETF saw its first billion-euro day in almost two years after the European Central Bank's hawkish turn earlier this month. (Bloomberg) -- The world's largest provider of exchange-traded funds is bracing for a record year of trading in its flagship European credit fund as uncertainty about the timing and severity of central bank tightening pushes investors into more liquid instruments. [Extracted from the article]

The picture is even bleaker for the riskiest corporate debt, with Goldman Sachs lifting its euro high-yield spread target to 450 basis points by year end, from a current level of 424 basis points. (Bloomberg) -- Banks are boosting their European credit spread forecasts as the prospect of aggressive interest-rate hikes rattles global bond markets. Separately, ABN Amro Bank NV said that the withdrawal of ECB corporate bond purchases could prompt a near-doubling of high-grade spreads to 95 basis points from 55 basis points. [Extracted from the article]

(Bloomberg) -- From Treasury yields hitting 3% to shorting technology stocks, traders are busy updating playbooks on what a more hawkish-than-expected Federal Reserve would mean for markets. Swaps traders now see a 76% chance the Fed will raise the policy rate by 25 basis points in March, compared with just 26% at the start of December. In Europe, the spread between U.K. and German short-end rates is climbing as investors expect the European Central Bank to trail the Fed and Bank of England in raising rates. [Extracted from the article]

(Bloomberg) -- The Bank of England will enforce its green criteria in corporate bond purchases for the first time, establishing a blueprint for investing in a part of the credit world rife with greenwashing. Waiting for the ECB The BOE is the first central bank to start scorecards, but it's following in the footsteps of Sweden's Riksbank, which this year started taking sustainability into consideration in its corporate bond purchases. [Extracted from the article]

The central bank said on Thursday that it will conduct purchases under its pandemic emergency purchase program at a "moderately lower pace." (Bloomberg) -- Contracts insuring against defaults from European companies barely budged after today's central bank press conference. [Extracted from the article]

The size of the cash cushion is a big reason for the calmseen in high-grade credit markets, even as traders becomeincreasingly watchful for signs for when ECB policymakers, who meet on Thursday, will start to wind downstimulus. (Bloomberg) -- Europe Inc. has never had more cash in thebank, boosting investor confidence that corporate debtmarkets can weather rainy days caused by the spread ofCovid-19 variants or the scaling back of central bankstimulus. [Extracted from the article]

The European collateral market remained tight at the end of last year as the amount of funding offered against euro-denominated corporate bonds collateral decreased while the funding against Euro government bonds was unchanged, according to the European Central Bank. The report concluded the amount of funding offered by convertible securities, high-quality corporate bonds, asset-backed securities and covered bonds fell in December while the funding from government bonds and equities was flat on the previous month. The ECB published on Friday the results of its December euro-denominated securities financing survey which offered a mixed picture of financing in the bloc. [Extracted from the article]

Observers torn between praise and disappointment [ABSTRACT FROM AUTHOR]

ECB support has helped, but investors remain selective [ABSTRACT FROM AUTHOR]

Strong demand means most deals can cope without central bank bid [ABSTRACT FROM AUTHOR]

Only strong names are coming to market since the ECB gave its most hawkish press conference in some time last week. Nonetheless, the key metrics in the primary bond market remain steady [ABSTRACT FROM AUTHOR]

Most importantly, holdings from each covered bond jurisdiction are made available for lending by at least one Eurosystem central bank." The European Central Bank has published guidance on its public sector purchase programme (PSPP) as the central bank has doubled the limit of acceptable cash as collateral to €150bn. The ECB added: "However, even though lending of covered bond holdings is not mandatory, the ECB and several other national central banks make their covered bond holdings available for lending. [Extracted from the article]

As with so much the ECB does to support the market, corporate bond buying will be difficult to turn back from [ABSTRACT FROM AUTHOR]

The ECB has not slowed its corporate bond buying over the summer, leaving syndicate officials trying to decipher how this will change autumn's issuance window [ABSTRACT FROM AUTHOR]