Monthly report
Trade tariff threat casts further doubt on Fed easing
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Overview
If implemented, trade tariffs carry G7 inflation risks, and a threat to the risk rally, pending pass-through to final consumer prices, suggesting more delay to Fed easing, and further US spread widening. Surging sovereign issuance has helped drive credit spreads to 10-year lows, as credit metrics improve. China and EM lead returns on 1M and 12M.
Key highlights:
- Macro and policy backdrop – Growth upgrades, trade tariffs likely to stall Fed easing
- Yields, curves and spreads – Longer yields stabilize but US spread widening intact
- IG credit and MBS – IG credit spreads near 10 year lows, as sovereign issuance increases
- High yield credit analysis – HY spreads continue to edge tighter in risk rally
- SI sovereign bond analysis – Quality bias in SI indices
- Performance – China, EM and credit led returns in January, and on 12M
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.
