Fixed Income – Page 6
-
White papersHow Long Will 75bps Stay in Vogue?
After an initial dovish reading of the FOMC statement, Jay Powell’s tone was firmly hawkish and led to a reversal in risk sentiment and a higher market-implied terminal rate. While the BoE also hiked 75bps, the bank signaled a lower endpoint. All eyes are on inflation data next week.
-
White papers
Market Scenarios and Risks - November 2022
We maintain the probabilities of our scenarios unchanged. Some of the risk factors we identify may occur in our central scenario, which is probably not yet fully priced-in by markets.
-
White papers
For the Fed, the impossible QT
The Fed has started shrinking its balance sheet as part of its fight against elevated inflation. However, QT is being challenged by the Fed’s new role as a counterparty of money-market funds. The process would be greatly improved if the Treasury were to announce a debt buyback financed ...
-
White papers
How the ECB’s climate tilt favours ice cubes
The European Central Bank is gradually decarbonising its corporate bond holdings in a move that will be beneficial to borrowers with clear net-zero targets. We expect increased spread differentiation between transition leaders and transition laggards, and consider how the design of our TargetNetZero strategy is well-positioned to capture the opportunities.
-
White papers
1-2 November FOMC meeting: debating a downshift, not a pivot
As widely expected, on 2 November, the Federal Reserve hiked the Federal Funds rate by 75bp, to 3.75-4.00%. The action marked the fourth consecutive 75bp rate hike this year. Investors initially interpreted the accompanying statement as dovish by selling the dollar and buying US Treasuries and equities.
-
White papers
Asset Class Returns Forecasts - Q4 2022
We reiterate the main driver affecting the current and forward-looking macro environments is a combination of sustained inflation, mounting recession fears and geopolitical developments. Price stability has become the paramount goal and even more complicated to reach, therefore CBs will make sure high inflation will not be entrenched in economic agents’ long-term expectations.
-
White papers
Cross Asset Investment Strategy - November 2022
Tightening monetary policy and slowing economic growth lead us to keep a cautious stance on risk assets, in light of potential liquidity and refinancing issues, particularly in low quality credit. We prefer US IG (over HY) segments and selectively like EM hard currency debt.
-
White papers
A Roving Recession
In this monthly series, we take a quick, comprehensive look at current macroeconomic themes that matter to clients.
-
White papers
Investment precision for corporate bond investors: Russell Fixed Income Indices
FTSE Russell has created the new Russell 3000® Fixed Income Index and corresponding Russell 1000® Fixed Income and Russell 2000® Fixed Income sub-indices.
-
White papers
Bonds that build back better
Some might argue that building a sustainable economy is a technological problem. It isn’t. The world is sufficiently stocked with greenhouse gas-reducing technologies such as renewable fuels, carbon capture and energy storage. What it lacks is capital.
-
White papers
Recession watch: triggers, outlook and what next for central banks
While recession risk is clearly elevated around the world, they are notoriously hard to predict with any accuracy, in terms of timing, duration or impact.
-
White papers
Fixed income indices: From benchmark to investment solution
Increasingly fixed income indices are being seen as an investment solution, given the steady growth of passive funds and ETFs in the fixed income space. The combination of the downward pressure on fees and a lack of performance differential for active funds means that passive AUM is starting to overtake active AUM.
-
White papers
Unearthing opportunities in Asian credit markets
2022 has been a challenging year for fixed income, with global investment grade bonds down 14% over the past 12 months. Investment grade corporate bonds in Asia have outpaced US and global bonds, mainly due to their shorter duration.
-
White papers
Navigating dark clouds across emerging markets debt
It has been an unrelenting year of negative headlines, with a war in Ukraine, inflation concerns and recession fears jolting investors into a frenzy. Capital Group Investment Director David Cheng sat down with Portfolio Manager Luis Freitas de Oliveira to discuss his thoughts on the challenging macro backdrop, the investment implications for emerging markets debt (EMD) and how, in his view, the asset class remains investable amid the growing headwinds.
-
White papers
Income Generator: Bonds Now: Five Strategies
2022 has been a difficult year for bond investors. However, yields have risen dramatically and are attractive on a go-forward basis. This Income Generator discusses five strategies for navigating bond markets today.
-
White papers
IG Credit: Strong Fundamentals, But Inflationary Pressures Grow
Current yield and spread levels, coupled with companies’ durable credit profiles, suggest that IG corporate credit continues to look attractive—but a number of risks remain on the horizon.
-
White papers
High Yield: Value on Offer, But Stormy Seas Ahead
While there are signs that volatility will likely continue in high yield through the coming months, this environment, ultimately, may prove to be a significant opportunity for value creation.
-
White papers
ESG investing in EM debt: enhancing sustainable development outcomes
Today’s financial markets are at an extraordinary juncture, grappling with persistently high inflation, war in Eastern Europe, global climate change and the ongoing and severe effects of the COVID-19 pandemic. Against this backdrop, fixed income investors are increasingly seeking to generate financial returns while building portfolios that support positive outcomes through environmental, social, and governance (ESG) investing.
-
White papers
Inflation still stubbornly high despite central bank hikes
Eurozone inflation reached 9.9% in September while UK consumer prices hit 10.1% amid rising food costs.
-
White papers
Schooling the Sovereigns
Bond markets appear to be disciplining policy inconsistencies, both within sovereigns and among them.
