We think a base case that central banks will follow a more measured monetary policy path than markets are currently pricing in is reasonable given the current backdrop.

Global bond markets have moved sharply in the wake of Russia’s invasion of Ukraine as investors have tried to assess the impact of an unprecedented raft of financial and economic sanctions. Mark Holman looks at the potential implications for inflation and growth, and highlights some areas of fixed income where yields have risen to near-crisis levels.

Default rate estimations depend on how you define defaults and what index you use, but there is no doubt we are at record lows in European high yield at the moment.

Aside from the fact that he is Italian and once served as governor of the Italian central bank there are other reasons why Mario will be concerned at the price action in Italian Government Bonds (BTPs).

After the most hectic week of the year to date, relative calm has at least temporarily been restored to markets.

Clearly the decision by Italian President, Sergio Mattarella, to refuse the appointment of Paolo Savona as the coalition’s Finance Minister, on the grounds of him being overtly eurosceptic, has backfired badly.

During and since the global financial crisis the Federal Open Market Committee (FOMC) has done a remarkable job in navigating the US financial system under extremely challenging circumstances, setting the standard for other central banks to follow.

We are currently of the view that the market panic generated by the plan published by the new Italian government is a bit excessive.

European ABS market performance and volatility have been remarkably stable since 2016, largely weathering broader credit weaknesses so far this year.