Monthly Report
Rapid US disinflation but Fed caution continues
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G7 economies have withstood policy tightening to date, apart from a mild Eurozone recession. Fed tightening may be nearly complete, but sticky core inflation makes early easing unlikely. Treasuries are rangebound awaiting signs tightening is complete. IG credits are relatively cheap after recent high yield outperformance.
Key highlights:
- Macro and policy backdrop – Service sectors stay robust, as lower inflation eases pressure on central banks
- Yields, curves and spreads – Curve inversions remain, except in Japan, where steepening follows Bank of Japan move
- Sovereign and climate bonds – “Greenium” stabilizes after duration and country weight changes squeezed it in 2022
- Performance – Gilts rallied in July, but 12M returns dominated by euro-driven gains in long euro governments and EM bonds
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.
