Fixed Income – Page 11
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Insight across the fixed income spectrum
Federated Hermes’ Fixed Income Forum in London on 14 November, included sessions on the future of money markets, the prospects for emerging market debt, and the attraction of private credit.
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Not your average credit cycle
Geopolitics, hard landings, falling consumer confidence and corporate belt-tightening could all be part of the investment picture in 2024. That was the message from Federated Hermes’ Fixed Income Forum in London on 14 November.
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Emerging markets: Where do we go from here?
China’s myriad medium- to long-term issues present investors with a challenge. For bondholders in particular, the question of investibility in the world’s second-largest economy is a pressing concern. In this update we consider which other markets might offer an attractive alternative.
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Up then (marginally) down again
Markets rose earlier in the week on hopes of an interest rate freeze from the world’s central banks; only to reverse course on the back of less dovish outlooks from the US Federal Reserve and the Bank of England.
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Multi-Asset Credit Investing: Why Now?
In today’s uncertain environment, high yield multi-asset credit strategies look compelling—especially given their strong track record through the cycle and the potential for attractive income.
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Four Reasons High Yield is More Resilient Today
The high yield bond market has undergone a fundamental shift over the last decade, with today’s higher-yielding, higher-quality market looking particularly resilient in the face of a potential downturn.
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The peak in rate hikes is an inflection point for bonds
You don’t have to be bearish on the economy to be optimistic on the bond market. Here’s why
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Mortgage-Backed Securities: A Timely Opportunity
Uncertainty over the direction of interest rates has led to a significant widening of spreads in the agency mortgage-backed securities market, creating a potentially attractive opportunity for investors.
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You heard it correctly—the nature of US high yield is increasingly high quality
In the face of inflation and steep Federal Reserve rate hikes, the US high-yield market has showcased remarkable resilience, maintaining a generally healthy state of fundamentals. Franklin Templeton Fixed Income sheds light on the current state of US high yield and how these bonds have become increasingly higher quality in nature.
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Central banks’ unwinding will put more public debt in market hands
The recent surge in global bond yields is partly ascribed to market worries about a greater supply of debt coming from governments. Some of this increase in yields should reverse when inflation nears central banks’ targets and monetary policy is less restrictive.
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Is ‘doing good’ too good to be true?
Businesses that align with ongoing structural changes in the economy will emerge as winners, with investors standing to not only do good, but also do well, believes Michalis Ditsas, Investment Director – Fixed Income.
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Grabbing the Bull by the Tail: Assessing Tail Risks Amid Complexity
As a case study into our assessment of tail risks, we discuss how the market-implied probability distribution for a recession has evolved over the past year.
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Don’t Wait for Goldilocks
Yield curves have steepened and the opportunity cost of waiting for a “Goldilocks moment” to add duration has risen. Learn why diversifying across duration exposures, or “riding the curve” offers a compelling solution.
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Corporate lending: Contrasting US and European private credit
Private credit – historically viewed as a niche asset class – has seen exponential growth over the last decade. Here, we explore key differences between the US and European private credit markets.
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Whatever happened to the recession - and does it matter for bonds?
Despite interest rates being hiked to their highest level since the mid-2000s and a mini crisis in the US banking sector, the US and other developed market economies remain in relatively robust health. A recession has, so far, been avoided.
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How to think about bonds in this new world
After the global financial crisis (GFC) in 2008, investors reduced their allocation to bonds, and broadly remained underweight the asset class for more than a decade. In 2022, the long period of accommodative central bank policy came to an end as inflation accelerated.
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Shorter versus longer-dated bonds: Is there a role for both in investor portfolios?
Money market and short-dated (one-to-five-year) bond yields are the highest they have been since the end of the 2008/2009 global financial crisis.
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Global inflation: Have deflationary forces subsided?
Global inflation continues to gradually cool, helped by lower energy prices and the impact of tighter monetary conditions. However, getting inflation back to 2% on a sustained basis could prove more difficult and depend on whether longer-term deflationary forces are able to re-assert themselves.
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Macro Perspectives: Diverging views on the economic path
Are current US market dynamics “too hot, too cold or just right?” What are the impacts of rising interest rates? What is the case for diversification? Our economists discuss these questions in our latest Macro Perspectives.
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A view on Italy and its government debt
On 20 October, S&P Global Ratings announced that it was keeping its rating of Italian debt unchanged with a stable outlook. The rating agency’s decision kicks-off a wave of autumn credit assessments and will be followed by DBRS Morningstar on 27 October, Fitch Ratings on 10 November and finally Moody’s on 17 November