Fixed Income

It's back-to-school time, and time for investment decisions... Will the US fall into recession?

The ECB has raised interest rates to 4.00% at the tenth consecutive meeting arguing that inflation is still too high.

Against a backdrop of volatile trading, August saw the return of a correlation between risk assets and rates...

If you were intrigued by our June comment on the return of the money markets (Money markets...

June saw some weak performances in European risky assets and spread products, with European equities, high yield and IG corporates posting negative returns.

As we reach the halfway point of the year, it seems that recession may be avoided on both sides of the Atlantic, but growth forecasts remain weak...

After more than a decade of suppressed and often negative yields, the fixed income asset class has entered a higher rate context.

Money market strategies are coming back. The multi-decade bonanza on the back of lower yields and accommodative central bank policies ended abruptly last year.

With equities performing the strongest over the month, the picture was rather mixed for fixed income asset classes, with no clear outperformance from any risky asset classes.

April saw positive performances for risky markets, with equities and convertible bonds outperforming, followed by high yield.

With the upcoming 2023 Turkish presidential election, scheduled to take place on 14 May, we are sharing our views and sentiments on the possible outcomes and their consequences.

In March, markets were driven by the strong performance of most asset classes, confirming a general trend year-to-date in which investors in most major asset classes have been rewarded with positive returns.

Bond investors did have a rough time in 2022. But a new era begun when central banks initiated their forced march of interest rates hikes, bringing some fresh opportunities to investors.

Portfolios managed by Candriam have no exposure to any Credit Suisse security, OTC exposure or stock-lending exposure.

In the weeks to mid-March, the dominating theme was perhaps the return of decorrelation between risky assets and rates.

After 2022, an “annus horribilis” for many investors, we believe that bond repricing now offers many opportunities.

The beginning of the year provided some relief to global investors and allowed them to claw back some of the losses they suffered in the previous year.

“Nowhere has it been considered a disastrous indirect tax is created by constantly rising inflation, nor what the results are.” (Welche vernichtende indirekte Steuer zudem in der fortschreitenden Papiergeldinflation liegt, wird übrigens an keiner Stelle berücksichtigt – Rudolf Havenstein, 1922

Market exuberance continued in December and through the first days of January, as risky assets posted a strong performance, once again on the back of signs of weakening inflation and the hope that central banks would strike a less hawkish tone.

After a bruising first 10 months in 2022 that saw fixed income investors suffering near-record losses in most asset classes, November offered the first true relief of the year.

The macro environment in 2023 is likely to remain challenging for emerging market debt, especially in the first half of the year.

October offered a mixed picture following a bruising first three quarters. The Bloomberg Global Aggregate Index was down 0.55%, driven primarily by losses in US Treasuries. However, investors in some segments of the credit markets, especially EUR HY, USD HY and to a lesser extent EUR IG did see positive performance. Most Inflation-Linked Bonds markets with the exception of the US also rallied on persistently high inflation.

Luiz Inacio Lula da Silva narrowly won the second round of Brazil’s election, beating incumbent Jair Bolsonaro. Initial fears that Bolsonaro wouldn’t accept the result, particularly if it was tight, have receded. Bolsonaro said that he would follow the constitution and play by the rules, while his chief of staff, acknowledged the defeat.

It is rather unusual for a President of the French Republic to openly criticise European monetary policy. A guardian of monetary orthodoxy, the European Central Bank’s (ECB) mandate is well known by all: to keep inflation close to 2%, regardless of budgetary policy.

After registering losses in August, there was no reprieve for fixed income investors in September. All major asset classes posted negative returns, with the biggest falls coming in UK gilts.