2024 | Quarterly Outlook | Fixed Income

The events in Europe following the European elections underscore how political developments can suddenly take center stage. In today’s insight, I take a quarterly view on the fixed income market, discussing;

Macroeconomic and policy outlook

• Hard to see growth outlook improving further

• Central banks cautious to cut rates, pending slower services inflation and weaker jobs growth

• (Geo)politics poses downside risks demonstrated by French EU elections

Rates strategy

• Yield levels expected to be rangeboud

• Curves set to steepen

• Underweights in Japan, Canada and Sweden

Fixed income asset allocation

• Up or out in high yield

• Political risks back due to fiscal worries

• Local factors can defend against king dollar