Energy Rebalancing - Preferred Shares - New Issues: ALA, TRP, BEP. BEPC, SPB
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An energy transition is underway. Viewed alone it is a complex enough issue, even more so when an uncontrolled virus is mixed in. The COVID pandemic has interrupted supply chains, causing prices to rise, and central banks to waiver on advice given only weeks ago that inflation is temporary. The impact from the energy transition and the virus are two separate issues, so are the solutions.
The virus is still a reasonably short term problem that is on the wane and should be in the rear view in the not too distant future. Still, it has lasted longer than expected, complicated by a heightened sense of entitlement and influence powered by access to social media.
Under these circumstances central banks will likely remain reluctant to implement anything but modest reductions on accommodative monetary measures. The standard indicator is the 10 year benchmark bond; it made an attention getting jump in yields last week with more expected in the near term. A move to 1.8% will get the market's attention.
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