MONTHLY REPORTS - JULY 2023
Fixed Income Insights is available in four versions, accessible from the links above. Each report uses a different currency for measuring returns and other metrics, as well as delivering localized content.
Fed pause suggests rates near cyclical peak as relative value favors US credit
Service sectors are stronger than manufacturing globally, and strongest in Asia, post-Covid. The Fed’s pause suggests most duration risk may be behind US Treasuries, though easing awaits lower core inflation. Gilts and JGBs underperformed on higher inflation and a weak yen. Credit outperformed, helped by yield levels.
Key highlights:
- Macro and policy backdrop – wide dispersion in inflation and de-synchronized cycles predominate, as Fed pauses
- Yields, curves and spreads – Structural flattening continues, US Treasuries range-trade, and credit finds sweet spot
- Sovereign and climate bonds – Sovereign re-weighting drives WGBI spreads tighter versus climate-WGBI
- Performance – Gilt yield spike and currency moves dominated Q2, led by weak yen and RMB. Credit outperformed
These reports provide actionable insights on global fixed income markets. They cover shifts in global yield curves and credit spreads, across sovereign, inflation-linked and corporate indexes, and FX-adjusted return performance using proprietary month-end data from our global fixed income indices.
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