Monthly report
Short inflation-linked outperform on stagflation risks
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Overview
Gold was the main winner in Q1 from higher stagflation risks, becoming the global safe haven of choice. The Fed and BoE must now finesse easier policy, while keeping inflation expectations stable, suggesting a slow easing cycle. Higher inflation accruals and stable rates favour linkers, and short linkers outperformed in Q1, helped by high real yields.
Key highlights:
- Macro and policy backdrop – Fed finesses policy easing at March FOMC
- Yields, curves and spreads – Curves oscillate but long end steepens, led by Bunds
- IG credit and MBS – Credit survived Q1 equity sell-off, but spreads widened
- High yield credit analysis – Signs of under-performance by CCC issues
- SI bond analysis – SI corporates mainly gained in Q1, though advanced-climate lagged
- Performance – Short duration bonds outperformed, led by Europe as dollar weakens
Please note the Europe edition combines the previously published UK and Eurozone versions of Fixed Income Insights.
These reports provide actionable insights on global fixed income markets. They cover shifts in global yield curve and credit spreads, across sovereign, inflation-linked and corporate indices, and FX-adjusted return performance using proprietary month-end data from our global fixed income indices.
For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.
