Latest insights

Over the past weeks, bond markets faced significant volatility primarily due to a barrage of announcements from the White House.

Over the month of January, rates markets ended up at much the same point where they stood at the beginning of the year, but masking significant intra-month volatility. Usually, an inauguration would not be expected to cause much turbulence, as policy proposals should be well-understood and priced in.

The last month of 2024 was a difficult one for the markets. Most major rates markets sold off, with the US 10-year rising by 40 basis points. At the same time, risk assets offered relatively little respite.

This US presidential cycle was historic in many ways, not least in terms of the starkly contrasting policy agendas proposed by the opposing candidates.

Following the US election, what will the bond landscape look like around the world in the near term and the medium term? President-elect Trump should be able to implement much of his political agenda over the next few years. We think four themes stand out: Tariffs, Regulations, Tax Cuts, and Immigration. What we don’t yet know is the timing and the magnitude of these elements.

Over a decade ago negative rates started looming, creating an unprecedented environment. Well the Fixed Income space is definitely the opposite, a lush jungle dominated by the canopy, aka the AAA-AA ratings, covering an Investment Grade A to BBB ratings understory, down to the High Yield BB and lower ratings forest floor.

Central banks were out in full force in September, with the Federal Reserve implementing a meaningful 0.5% rate cut, while the ECB continued its easing cycle with a cut of 0.25%.

Over the last 2 years Central Banks-driven rates hikes have deeply impacted the High Yield markets globally.