Your Weekly Edge



The following audio episode  provides an in depth discussion of this weeks news from "The Edge".

 

 
 

 

 🟡 The Weekly Edge – 1st May 2025

 

Sliding Dollars, Sinking Confidence & the Illusion of Calm
Brought to you by the team at Gilt Investments

Welcome back to The Weekly Edge—where we read between the headlines, sidestep the spin, and help you steer through fixed income markets without mistaking turbulence for trend.

This week? It’s a masterclass in contradiction.

Markets are smiling. But under the surface? Cracks. Everywhere.

💥 Tariffs Are Back — and Louder Than Ever
Trump’s latest tariff play isn’t just posturing—it’s a full-blown sledgehammer. With new levies pushing past 120%, U.S.–China tensions are escalating fast.
The U.S. dollar? Down 7% YTD and struggling to keep its cool.
Meanwhile, the yen, Swiss franc, and even the British pound are quietly reclaiming relevance as investors reach for anything that isn’t falling off a geopolitical cliff.

But this isn’t just FX noise. It’s feeding through the bond markets in real time—yield curves twitching, inflation risk repricing, and safe havens no longer acting like safe havens.

📉 Cracks in Credit, Consumers on Edge
The private credit boom is showing its first major stress fractures. Over 40% of direct lending borrowers are now cashflow negative. That’s not a typo—that’s a warning sign.

Why does it matter?
Because credit cracks are how bigger tremors start. Combine that with the largest drop in U.S. consumer sentiment since 1990, and you’re looking at a market that’s skating on increasingly thin ice—while pretending it’s still the middle of summer.

For fixed income investors, this is a red flag. Widening spreads, declining sentiment, and invisible balance sheet risks are forming the trifecta of trouble.

🇦🇺 Australia: Still Floating, But For How Long?
Back home, Australia looks almost serene by comparison. Bond yields are steady around 4.2%, equities are drifting higher, and there’s a general sense of “we’ve got this.”

But peel back the curtain, and APRA is sounding quiet alarms. Banks are hustling for deposits, whispers of a AAA credit rating downgrade are growing louder, and if offshore sentiment shifts—our borrowing costs will shift with it.

Steady doesn’t mean safe. And resilience isn’t immunity.

🧭 Final Take: Trade the Market You Have, Not the Narrative You Want
This week’s episode drives home a familiar message for seasoned bond watchers:

  • Tariffs don’t just change trade—they warp capital flows.

  • Private credit isn’t immune to gravity.

  • Hope is not a yield strategy.

  • And Australia’s steadiness might just be the eye of the storm.

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Stay nimble. Stay informed. Stay steady.
We’ll see you next week on The Weekly Edge.

— Brought to you by the team at Gilt Investments

 

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