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Summary 2022 has been a volatile year for credit markets, but a closer inspection highlights some striking differences. Yields on EM HY reached much higher levels (close to 14% at its peak), and spiked much faster, than their Euro and US equivalents, which peaked at around 9% in Q4 2022...
Summary As central banks battled inflation, interest rates soared and recession fears mounted. Now, central banks must slow their pace of tightening and carefully calibrate a soft landing. We address the challenges of a global slowdown, the benefits of higher yields and strategies f...
Summary Emerging market and high yield bond markets have improved in recent weeks, indicated by both aggregate and issuer-specific developments. There has been a general improvement in risk appetite during the last month, based on expectations of a less-severe upward trajectory for poli...
Summary Rate hikes and tighter financial conditions drove fixed-income returns lower in 2022. The broad repricing of bonds and the higher starting yields we have now can help insulate investors from further losses. If we look at international bonds, this is probably the first ...
Summary Year-to-date, allocations to floating rate notes have resulted in a more than 20% performance differential compared to U.S. 10-Year notes. Rising rates explain why owning the same securities as the Agg but reducing the maturity profile (1–5 years) led to losses that...
Summary We believe it is unlikely that Fed Chair Jerome Powell will navigate a pivot to a less-hawkish stance before early in 2023. We expect China to grow at a meager 2%-3% pace in 2022, with the potential for these risks to bleed into 2023, as a slowing developed-market consumer...
Summary Last week brought the third consecutive 75-basis point rate hike from the U.S. Federal Reserve. The week also brought more signs of this rapid hiking cycle reverberating worldwide. We think credit spreads can offer a remunerative and relatively calm haven amid the vola...
In the second quarter, we've seen double-digit negative returns across the fixed income landscape. For corporate bonds on the investment-grade side of things, we've seen spreads tick 160. A lot of what's going on right now is just the aftermath of a pandemic that's disrupted the h...
As we enter the second half of 2022, predictions of a possible recession range widely as the key drivers of inflation shift from goods to commodities and services, notably housing. For bond investors, the sharp rise in the rate landscape has had an outsize impact across the board, wit...
Investors see further Fed rate rises, but believe they will start moderating in size after September. Investors continue to see some risks to credit markets, with views that fundamentals will deteriorate and spreads will generally widen somewhat. There is uncertainty around when a...