Multi-Sector Bonds

Felipe Villarroel shares his thoughts on the recently released preliminary PMI data, which he concludes is a reminder that the hiking cycle only started 18 months ago and there are lags that are yet to be felt in the real economy, reiterating some of his previous views.

An interesting debate, and topic that is attracting plenty of headlines given the recent volatility is where Treasury yields will ultimately settle, with a renewed focus on the neutral rate. Eoin Walsh explores the previous movements of Treasury yields and what Powell is likely to say at Jasckon Hole.

After a difficult 2022, bonds may be poised for unusually high returns compared to historic averages. And not just in the US -- we see opportunities in European CLOs and RMBS. They offer double digit yields for short-dated debt and look very attractive on a relative value basis compared to domestic credit.

Bank bonds have been amongst the best performing asset classes in fixed income over the last few months, doing their bit in proving their strength.

As mid-year investment bank reviews hit our screens, we are seeing a shared expectation of spread decompression between IG and HY bonds, signalling rising defaults. Pierre Beniguel argues that tightening HY spreads and resilient performance suggest surprising sector support due to lower issuance and available cash.

What can we expect from central banks this week? Felipe Villarroel looks at how recent CPI prints in the Eurozone and in the United States are expected to influence upcoming central bank monetary policy decisions.

What have we learnt from the ECB’s Consumer Expectations Survey? Felipe Villarroel discusses how latest changes in the consumer’s expectations of the economy reflect that the ECB’s monetary policy is actually working.

In the last few weeks the high yield primary market has seen a resumption of issuance which Portfolio Manager George Curtis believes points to a relatively buoyant market.

Despite the recent volatility in the banking sector, corporate credit has remained strong. Pierre Beniguel looks at the interesting rating action which caught attention last week.

February was a nasty throwback to the sort of market conditions that battered fixed income in 2022, but the pull-back has given anyone worried they’d missed the January rally an even better opportunity, says Charlene Malik.

While corporate fundamentals are expected to deteriorate as rate hikes hit the economy, many metrics are pointing to record strength in the European high yield space, says George Curtis.

With risk assets rallying hard in the early weeks of 2023, Chris Holman reviews fundamentals in high yield bonds to see if recent performance has left any value in the market.