Monthly report
Curve steepens as longs underperform
Geopolitical tensions, tariff uncertainty and higher oil prices created a volatile environment for global fixed income in Q2, with investors navigating between risk-off and risk-on assets. Shorts outperformed longs, though returns were largely driven by currency moves. Canadian credits were up 1-2%, benefitting from the recovery in equity markets.
Key highlights:
- Macro and policy backdrop - Tariffs impact Canada’s labour market
- Canadian governments - Curve steepening continues
- Canadian credit – What Tariffs, what geopolitical tensions?
- Global yields and spreads – Global yields fall in June
- SI bond analysis – Duration and sector weights drive SI Corp relative performance
- Performance – FX moves drive performance in Q2; longs extend losses
This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional, inflation-linked and corporate bonds within the Canadian fixed income market.
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