Gary Stevenson

What's the RUB? Equities sit at a pivotal inflection point, with competing forces in play. The macro hinge remains the inflation–Fed easing trajectory: stabilization enables policy support, while persistence forces repricing. Execution on AI and earnings is equally critical — mega-cap leaders must deliver against high expectations to sustain stretched multiples. Geopolitical and trade frictions, plus shutdown risk, linger as exogenous shocks. Market breadth remains the key tell: broadening supports durability, while Mag7 concentration signals fragility. 👇👇 https://lnkd.in/eppzi8EP

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J.P. Morgan chief, Jamie Dimon, has been complimentary of the UK government’s economic policy. He stated that there is “much to like about the government’s pro growth agenda”. Larry Fink, BlackRock CEO, mirrored these thoughts, stating he was buying UK assets as they were “undervalued”. Rt Hon Rachel Reeves is planning to use these comments, as well as recent positive economic data, to talk up the UK economy. Various data points, albeit predating US tariffs, has surprised to the upside for the UK recently: - the economy grew 0.5% in Feb against expectations of a contraction - inflation fell more than expected to 2.6% in March - retail sales rose 0.4% in March, again against expectations of a contraction This positive view certainly goes against the feeling on here/more generally. Is Reeves right to be painting this picture. Source: https://lnkd.in/dy9fvfKr

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Despite some ups and downs, rates in general have been effectively flat in February. If you take a deeper look, though – and compare TBAs, SOFR, Treasury and Optimal Blue's OBMMI – another story unfolds. In the chart below, you'll notice that there isn't much dark blue, which represents OBMMI. Rather, this chart represents which rate moved the most on a given day.   What does this mean? It illustrates the pricing behavior of lenders that aren't passing as much of a SOFR, Treasury, or TBA move to their front-end pricing. This relationship can complicate pricing & hedging mortgage assets.   A few weeks ago, I discussed this behavior during the #OptimalBlueSummit2025 with the CME Group Interest Rates's Eric Leininger and Brendan Wilson, CFA, and it show's why the Mortgage Rate (OB30C) Future should be an important part of mortgage risk management. Check out this white paper to learn more about why it's an important consideration for your lending profitability: https://lnkd.in/eeaufMK9   I will be at the Structured Finance Association's conference in Vegas next week if you want to connect to learn more.

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Private markets 🏢 🏗️ 🏬 Great to be able to share some of the ideas we've been developing on how private markets might feature in our investment portfolio. A few points to emphasise: We want to do something that really adds ££s to members pensions, that means a few things: - Build in hurdle rate requirement over and above what listed markets can already offer (after fees) - Pathway to a meaningful allocation of the portfolio, real conviction, not just toe in the water. - Fees that offer a fair split of economics and leaves the value generated from these assets in the hands of members (sounds obvious, often doesn't happen) Scale is key. We've now reached the right scale for this, so we can hold these assets in the optimal way, for example: direct deals, co-investments, funds. Structures, vehicles and operations matter here. Good and bad investments exist in private markets, plus private markets are less efficient. This leads to opportunity and risk and the investment process has to adapt. You need the expertise internally to analyse and build conviction in sectors and deals. You need the right external partner(s) who can provide access to opportunities on the right terms. Our growing team of 20 dedicated investment professionals is now getting to the stage that makes this possible. Small team, big impact, important work. Deployment timelines. A big issue over last decade has been the availability of opportunities in the UK - it's just been hard to deploy meaningful assets due to bottlenecks created by grid connections and planning. Some signs these might change. We would like to look predominantly to the UK for these assets but if the right opportunities aren't there we will go elsewhere. Looking forward to developing this further with the team over 2025. Exciting times for UK pensions, lots of work, let's do this! Inboxes melting today over here... https://lnkd.in/emaKdBcD

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Standard Chartered Weekly Market View (Oct 24 2025) A healthy correction in gold • #Gold forecasts raised to USD 4,300/oz (3-month) and USD 4,500/oz (12-month), driven by geopolitical uncertainty, fiscal policy concerns, Fed independence, and de-dollarisation. • Recent gold pullback is a healthy correction; may continue near-term to USD 3,945-4,060/oz. • Investors with low gold exposure should consider averaging into gold and gold miner equities; recommended 7% allocation. • US credit market concerns are idiosyncratic; tactical opportunity in short-term high yield #bonds, but cautious on financial sector #equities, favoring high-quality #technology sector. #investing #markets #economy

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It was great to be joined by Peter Madsen and Shane McGarry, CFA for our webinar last week, 𝘈 𝘍𝘪𝘴𝘤𝘢𝘭 𝘐𝘯𝘧𝘭𝘦𝘤𝘵𝘪𝘰𝘯 𝘗𝘰𝘪𝘯𝘵? 𝘐𝘮𝘱𝘭𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴 𝘍𝘰𝘳 𝘈𝘴𝘴𝘦𝘵 𝘈𝘭𝘭𝘰𝘤𝘢𝘵𝘪𝘰𝘯. The discussion was full of thoughtful perspectives on how allocators are navigating today’s macro environment. A few highlights across the three main themes: • 𝐁𝐨𝐧𝐝𝐬 𝐚𝐬 𝐝𝐢𝐯𝐞𝐫𝐬𝐢𝐟𝐢𝐞𝐫𝐬: Views differed—some favour synthetic duration via hedge fund strategies (with potential tax benefits), others see real yields >2% as attractive and also scope for a more tactical approach to capture any spike in yields. • 𝐓𝐫𝐞𝐧𝐝 𝐟𝐨𝐥𝐥𝐨𝐰𝐢𝐧𝐠 𝐫𝐞𝐦𝐚𝐢𝐧𝐬 𝐜𝐨𝐫𝐞: Despite recent underperformance of trend following, conviction is holding on the strategy as a key portfolio diversifier. Some are tilting more toward discretionary macro in the near term, others are using the drawdown to re-underwrite managers. • 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐝𝐞𝐬𝐢𝐠𝐧 𝐢𝐧 𝐚 𝐧𝐞𝐰 𝐦𝐚𝐜𝐫𝐨 𝐫𝐞𝐠𝐢𝐦𝐞: A shift toward more “all weather” or resilient allocation frameworks is underway—but what that means varies widely across investors. If you’d like access to the recording, feel free to get in touch. #assetalloction

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𝗛𝗲𝗱𝗴𝗶𝗻𝗴 𝗹𝗼𝗼𝗸𝘀 𝗲𝗮𝘀𝘆 – 𝘂𝗻𝘁𝗶𝗹 𝗶𝘁 𝗶𝘀𝗻’𝘁. On paper, it’s simple: You’ve got an asset. There’s a risk you want to neutralise (or are required to because of regulation). So you slap on a hedge – probably a derivative – and call it a day. Sorted, right? Let’s take a common one: You’re managing a USD equity portfolio worth $100 million. Your base currency is SGD (becasue you are a Singapore based Instiution). So now you're long USD equities 𝘢𝘯𝘥 long USD vs SGD. To hedge the FX, you sell USDSGD forward – usually on a 3-month roll via FX swaps. In theory, your hedge notional tracks the portfolio's USD market value. Start at $100m. Three months later it’s $103m? You update the hedge. But theory starts to wobble when: • The hedge isn’t marked properly • MTM swings are ignored • Entry cost gets confused with full-cycle P&L • The hedge gets treated like a standalone trade instead of protection I’ve seen PMs brag they “saved 8bps” by waiting for a tighter spread – unhedged for days in the process. Legged, exposed, and completely missing the point. They celebrated a cheaper entry... while the hedge P&L was quietly flapping in the breeze. Then there's the  confusion betweern 𝘵𝘳𝘢𝘥𝘪𝘯𝘨 and 𝘩𝘦𝘥𝘨𝘪𝘯𝘨. The moment your hedge isn't in place – your're trading , not hedging. Fine if you are a prop trader. Bit of a problem if that is not your mandate. Now that’s before we even talk about 𝘮𝘢𝘯𝘢𝘨𝘪𝘯𝘨 the hedge mid-cycle: Taking profits. Restructuring. Exploring options or hybrids. You know… optimising. Outside a bank market makers trading book, most hedges are treated like fire extinguishers – set and forgotten until something explodes. That’s risky enough in FX. But with long-dated interest rate swaps? It can be a slow-motion disaster – especially for insurers who think “set and forget” is a strategy. But a good hedge doesn’t just sit there. It earns its keep. 💬 What’s the worst hedge mistake you’ve seen (or made)? No judgment – only stories. #mikeduncan #ParaBellumAdvisors #ᴍᴀᴋᴇitʜᴀᴩᴩᴇɴ #FXHedging #Derivatives #Hedging #RiskManagement #CapitalMarkets #Structuring   #LBFalumni #SkyHighTower🚀

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