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With the first Labour budget since 2010 dominating headlines, hallway conversations and family gatherings in the UK for the past couple of months, the stakes were very high indeed for the chancellor, Rachel Reeves, on Wednesday. Political opinions aside, the budget is usually an important event for market participants and this one was no exception.

With elevated yields and inflation expected to come back to target, we think investors can target a level of real return that was extremely difficult to achieve in the previous cycle.

Despite higher interest rates and cost of living increases across jurisdictions, there is no sign as yet of any impact on issuance levels in European consumer ABS.

A lot has happened since our last blog about the state of affairs in the European High Yield (HY) market. At the time, the sector had just seen three of the largest capital structures of Altice France, Ardagh Group and Intrum AB announce restructuring advisors in quick succession, with growing fears that it would represent the start of a wider default trend.

George Curtis (Portfolio Management), from our Multi-Sector Bond team provided a comprehensive understanding of the key aspects of yield curves.

In this inaugural edition of Flash Fixed Income, we look at the highly unpredictable US presidential election and explain why a potential second Trump administration could limit the Federal Reserve’s ability to deliver more rate cuts.