April 08, 2024

Fixed Income Insights - April 2024

Monthly report

Higher for longer rates returns as the dominant narrative

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Government bonds stabilised in March but failed to match equity market gains, as early easing prospects receded. Resilient US growth, early signs of European recovery, a disinflation stall and the end of BoJ curve control capped G7 government bond rallies. High yield credit’s closer correlation to equities drove further gains in Q1.

Key highlights:

  • Macro and policy backdrop –  US soft landing and disinflation stall herald return of “higher for longer” rates
  • Yields, curves and spreads – Curves revert to bear inversion in Q1 after brief bull steepening in Q4
  • Credit and MBS analysis –  Spreads tighten further, and IG spreads converge on RMBS despite agency guarantee
  • High yield credit analysis – CCC credits have outperformed in the 2023-24 rally
  • Sovereign and climate bonds –  SI bonds broadly tracked parent indices in Q1, though Green WBIG outperformed
  • Performance –  HY credit again outperformed in Q1, as G7 government bonds de-coupled from equity market rallies

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.

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